Insurance broker licence cancelled

The Insurance Regulatory and Development Authority (IRDA) has cancelled the direct insurance broker licence of New Delhi-based Paramount Insurance Brokers Pvt Ltd. In a notification, the IRDA said that the decision had been taken after an enquiry into the complaints against the broker which include soliciting and procuring insurance business by employing persons not having requisite qualifications as prescribed under Regulation 9, indulging in inducements in cash or kind t o the clients’ directors and the persons acting as introducers, contravening the provisions of section 41 of the Insurance Act, 1938 and non-compliance with Regulations 27 of the IRDA (Insurance Brokers) Regulation 2002 as to the maintenance of systems of internal controls and internal audit, among others. The cancellation would come into effect immediately, according to the notification.

Source: The Hindu Business Line

Corp Bank’s insurance plan faces LIC hurdle

KOLKATA: Even as most big public sector banks are planning to float individual life insurance ventures, it may take a while for Corporation Bank to start off with a foreign ally.
The reason: The Life Insurance Corporation’s (LIC) 27% stake in the bank. The bank may have to remain LIC’s largest bancassurance partner until it gets the government’s nod for a separate venture.

Whether Corporation Bank would choose to remain a principal distributor for LIC or have its own insurance venture is difficult to guess.
When asked, B Sambamurthy, chairman and managing director, Corporation Bank, told DNA Money: “We are not interested in the general insurance business as there is a lot of competition. As far as life insurance is concerned, we are not looking into it as of now. What will happen later, no one can say”.
Industry analysts say that it’s a tricky situation as LIC’s strategic stake in the bank is unlike its investments in other banks such as UTI Bank or Oriental Bank of Commerce.
While the government’s say is the last word in case Corporation Bank wants to pursue its own venture, LIC has voting rights and an amicable consensus will be in the best interest of both institutions.
Sambamurthy was in the city to speak on financial inclusion organized by the FICCI on Tuesday. He said that the bank was interested in new areas like mobile payment systems and wealth management in the current year.
Without disclosing details, Sambamurthy said: “We are examining the mobile payment system and will conduct a pilot project in Delhi. This initiative will shape the future of banking in the country”.
The bank has no plans to come up with a follow-on public offer, but may raise Tier 2 capital sometimes this fiscal. “We have a capital adequacy ratio of 12.5% and may raise some capital if the need arises. The bank has a headroom of Rs 4000 crore for Tier 2 at present”, he added.

Source: DNA

Mediclaim to cost a bomb now

MUMBAI: The days of 'pay it-forget it-claim it' of health insurance are numbered. What lies ahead, at least with India's largest general insurance player, New India Assurance, are sweeping changes of the kind Indians aren't used to. These include higher premiums as you grow older, or for that matter, if you live in a Zone I city like Mumbai. From July 15, if you are a Mumbaikar, you pay a higher premium than those in Delhi or Bangalore, who in turn, pay more than those in other parts of the country. That is because New India Assurance reckons that Mumbai is the most expensive city to get hospitalised in. Delhi or Bangalore, which lie in Zone II, are cheaper, but more expensive than the rest of the country that has been classified as Zone III. So, for a Mediclaim policy worth Rs 2 lakh, a Mumbaikar in the 5-35 years age bracket will pay an annual premium of Rs 2,595. Those in Zone II will pay Rs 2,530 and those in Zone III will pay only Rs 2,470. But there is a caveat here. If you pay Zone I premiums, you can avail of treatment anywhere in the country and get 100% coverage. If you live in Delhi or Bangalore, however, and are admitted to a hospital in Mumbai, you will have to bear 10% of the claim while those from Zone III will have to have pay 20% of the expenses if treated in India’s commercial capital. But that is only the beginning. Children between three months and five years will have to pay a higher premium than those between 5 and 35 years. This is presumably because according to sources, data shows a higher incidence of claims for children in that age group. Then there is the whole thing about age brackets. Until now, the brackets were defined in 10-year segments. That will now be five years. Therefore, if you are 37, live in Mumbai and had subscribed to a policy worth Rs 2 lakh, your annual premium in the earlier regime would be Rs 3,900 until age 45. Now, if you are between 35 and 40, the premium for the same cover will be Rs 2,990. Between 40 and 45, it will shoot up to Rs 3,665.

Source: Times News Network

‘Strong growth predicted in insurance sector’

MUMBAI, JUL 9 : Swiss Re’s sigma study reported that strong premium growth seen in both India’s life and non-life sectors is expected to continue in 2007.
The life business saw an exceptionally strong 60% growth in 2006, with aggressive business expansion by the private sector particularly through the use of new channels such as bancassurance sales.

The drive to increase rural penetration by the regulator is expected to further this growth drive in 2007, said the study. A strong 17% growth in non-life premiums was observed in 2006.
‘While the pace of growth is not expected to be maintained in 2007, changes in the tax deduction limits for medical insurance and sustained economic growth are expected to continue to underpin demand,” observed the report. The report further said the world insurance premium growth in 2006 accelerated further, driven by the strong expansion of the life insurance sector.The worldwide premiums written amounted to $3723 billion, an increase of 5% over prior year.
The performance of the insurance industry has further improved in terms of capitalisation and profitability. Real premium growth in the emerging markets of 16% continued to outpace the growth of 4% experienced in the industrialised countries.
Looking at insurance spending, the industrialised countries spent about 9% of the gross domestic product on insurance in 2006, while in the emerging markets this ratio varies from 1.4% in the Middle East and Central Asia to 4.7% in Africa.

Source: Financial Express