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Volume 1, Issue 5, November 2005  


MetLife cover for PNB account holders

Metlife India Insurance Co Pvt Ltd has launched a group life insurance cover - Met Group Life - specially designed for Punjab National Bank ‘s (PNB) account holders. The scheme has been arranged through PNB Principal Insurance Advisory Company Ltd. The scheme is available to all the current and savings account holders of PNB between 18 and 64 years of age holding accounts in any of the 1,426 centralised banking solution (CBS) branches of the bank. According to the arrangement, PNB would be the single group policyholder.

Sun Life looks to India for growth

Sun Life Financial Inc sees India to be the major contributor to its operations and plans to double the number of sales agents in India by next year through its joint venture Birla Sun Life. The company plans to open 50 branches in the next 12 months.

"While we have enjoyed early success, it is still early days in a very competitive market. But given the correct market position and strong brand, we believe that India will continue to be an important market for Sun Life Financial in Asia as we move forward." Says, Gary Comerford, Sun Life's vice-president, international, and general manager, India

It currently has 11,500 agents in the field, and that number should rise to 20,000 by September 2006 at a rate of 750 per month.

U.S. asks India to ease insurance-stake limit

The Indian government, which limits foreign insurers' stakes in joint ventures to 26 percent, has promised to raise the limit to 49 percent. But the U.S. ambassador to India, David Mulford, has demanded that foreign insurers be allowed to hold controlling stakes.

"This promise needs to be delivered not five years from now, but soon, if India wishes to regain its credibility in the eyes of foreign investors," Mulford said Thursday at a conference in New Delhi.

Foreign companies like New York Life Insurance and American International Group have formed joint ventures with Indian partners, since the government dismantled the monopoly of state-owned insurers in 2000, seeking to widen insurance coverage in the nation

"The government is building a process" to raise the limit on overseas investment in insurance to 49 percent, Rao said.

Oriental Insurance, India Post tie-up

Oriental Insurance Company has forged a strategic alliance with Indian Post to market its products using the latter's extensive network. Under the scheme, 34 post offices in the State will market identified products of the Company.

The products including health insurance, personal accident insurance, home insurance will be sold through post offices. Postal staff has been trained by the Company to answer the queries of the customers especially in rural areas.

The Company will be giving 15 percent commission to the post office for sale of its products. Out of this commission, it will share 10 percent with the concerned staff who have helped to procure the said insurance.

The Company also expects that by using the network of post office, their products will have a wider reach. Postal department has a target of selling the insurance products to earn premium worth Rs 2 crore during this fiscal.

Aviva targets one million rural customers

Aviva Life Insurance India (ALII) has partnered with Basix, a micro finance institution, to bring one million members of micro finance institutions in the country under ‘Credit Plus' insurance cover by 2010. Credit Plus was introduced three years back and at present 1.5 lakh out of the existing 2.5 lakh customers of Basix have been covered under the plan.

ALII, a joint venture of Dabur and Aviva Plc of UK, launched an enhanced version of Credit Plus, a group credit-cum-life protection plan for rural people in the age group of 18-55 years. The low cost insurance plan is especially designed for Basix, which is working with 1.74 lakh poor households in 27 districts spread across seven states in the country.

Birla Sun Life plans to enter micro-insurance

Birla Sun Life Insurance (BSLI) plans to enter micro-insurance in a big way leveraging its strong rural distribution infrastructure. While the strategies are still being worked out, it is learnt that over a period of time, the company proposes to cover both general and crop insurance to the needy farmers across the country.

The company has built its rural infrastructure with a cost-effective distribution network across the country. For this fiscal, the target for the total policies to be sold is close to 65,000 (48128 last year) with NGOs contributing nearly 80% and the rest by the Aditya Birla Group units.

Life Insurance Council to set up MMIB

Life Insurance Council, the representative body of all Life Insurance companies in India, is floating a new company along with Actuarial Society of India (ASI). This new company, Mortality and Morbidity Investigation Bureau (MMIB) is registered with the Registrar of Companies in Mumbai.

The main task of this company will be to prepare a totally new mortality chart, since the life expectancy has improved. The life insurers will use this mortality chart to fix up premiums rates for the various insurance polices. MMIB will determine the data that needs to be collected for mortality, morbidity and other specific risks, which are related to the contingencies in life insurance domain.

IRDA appoints Central Public Information Officer

Effective from 13 th October, Right to Information Act, 2005 comes into force. To discharge the functions assigned under the act (IRDA) has designated its Executive Director (Administration), V. Vedakumari, as it's `Central Public Information Officer' and C.R. Muralidharan, the `Appellate Authority'

SBI Life launches “Dhana Vriddhi”

SBI Life Insurance Company Ltd has launched "Dhana Vriddhi" - an investment-cum-protection life insurance policy. It is a non-participating Single Premium plan and is available for a fixed period of five years. It is expected to give a return ranging from 5.86 per cent to 6.29 per cent on gross single premium depending upon the amount of sum assured.

Bajaj Allianz's new HealthCare Plan

Bajaj Allianz Life Insurance Ltd has launched a HealthCare Plan that provides comprehensive health cover with life insurance benefit. It is a 3 year plan with a fixed premium. The unique 6 in 1 plan provide life cover, hospital cash, surgical benefit, post hospitalisation benefit, critical illness cover and accidental permanent disability (partial and total). The benefits of this plan would be available for hospitalisation in any registered hospital with 15 beds across the country.

IRDA to introduce strict licensing norms

IRDA is expected to recommend amendments to the Insurance Bill. The Bill may be tabled in the winter session of Parliament. The regulator is slated to submit its final recommendations to introduce stringent licensing process for insurance agents. The IRDA is under pressure from industry to do away with the 100 hrs training but make the final exam stricter. The insurance industry has also suggested to IRDA to allow freedom and flexibility to the companies to fix remunerations for their respective agents. At present, the remuneration of the agents is totally commission based.

IRDA may allow Composite insurance policies for micro insurance

In India micro-insurance is defined by the size of the policy (Rs 5,000-Rs 50,000 sum assured) and covers health, household, fire and motor insurance portfolios that are non-commercial or of lower asset value. IRDA will soon issue broad guidelines to integrate life and general insurance.

As per the new regulation, individual companies will now be allowed to design composite products within broad parameters. They will be branded as micro-insurance products for `file and use'. A single agency system can sell these packaged composite products.

The new micro-insurance regulations on the anvil allow cross-selling of insurance products by life and general insurance products. Pending finalisation of the regulations, the four public sector general insurance companies are keen on tying up with LIC in the area of micro-insurance.

MNYL plans to expand

Max New York Life (MNYL), one of the leading insurance companies, plans to open 40 more branches in the B & C category cities of the country within a couple of years to tap the high growth sector for existing as well as for new companies. Ranking Gujarat to be the best destination, the expansion will take place in Jamnagar, Vapi and Baroda for offices of the company.

LIC cover for 2 lakh farm laborers

In a first of its kind move in Andhra Pradesh, a whopping two lakh agricultural labourers have been covered under the social security scheme of Life Insurance Corporation of India (LIC). The labourers have been covered under the Janashree Bima Yojana, launched by the life insurance behemoth four years ago.

Janashree Bima Yojana is a group insurance scheme for members in the age group of 18-59 years and involves a premium of Rs 200 per member annually. The benefits include Rs 20,000 in the case of natural death and Rs 50,000 in the case of death or permanent disability due to accident. Of the Rs 200 annual premium that they need to pay, Rs 100 is subsidised from the social security fund of the central government while the state government through the district rural development agency contributes Rs 100.

IRDA to strengthen inspection mechanism

The Insurance Regulatory and Development Authority is strengthening its inspection mechanism to keep a closer tab on the business activities of insurance companies. The regulator is working on streamlining the process of inspection, said C.S. Rao, Chairman, IRDA.

Rao said the regulator would either have a separate inspection department or depute nodal officers who deal with actuarial, investment and accounts matters for the purpose.

Currently the regulator monitors three areas viz., investment, market conduct, and accounts. With respect to investment norms, inspection is currently outsourced to chartered accountant firms, which examine reports and check compliance.

Besides the annual inspection of accounts furnished by insurance companies, IRDA also scrutinises market conduct issues as and when they come up, said Rao.

"We will depute three to four people for the purpose of inspection," said Rao.

IRDA studying online sale of policies

The Insurance Regulatory and Development Authority of India is studying the implications of Internet selling of insurance products and will take precautionary measures if needed, Mathew Verghese, former member, Non-life,

The policies sold on the Net are usually smaller and less complex such as travel insurance or personal accident covers. IRDA was looking at the issues of privacy - where personal and financial details are submitted, payment of premium as well as other transactions on the Internet, said Verghese.

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