I was hitting the ski slopes when a bizarre accident occurred. While fumbling my way off a chair lift, another chair hit me from behind and knocked me out cold. I woke up with a headache, in a hospital bed and immediately called my insurance company.
After explaining what happened the insurance rep said, “We’re covering nothing on this claim. You hit yourself in the head with a chair on a ski lift. You’re an idiot. And that’s a pre-existing condition.”
Tuesday, August 5, 2008
A Skydiver is Blown Off Course
A skydiver is blown off-course and lands in a tree in a remote area. After dangling from branches for an hour, he spots a hiker walking by.
“Excuse me,” yells the parachutist, “but could you tell me where I am?”
The hiker looks up and says, “Yes, you’re twenty feet above the ground.”
“Thank you,” replies the skydiver, “You must be an actuary.”
“What makes you say that?” asked the hiker.
The skydiver answered, “Because what you just told me was 100% accurate, but totally worthless!”
“Excuse me,” yells the parachutist, “but could you tell me where I am?”
The hiker looks up and says, “Yes, you’re twenty feet above the ground.”
“Thank you,” replies the skydiver, “You must be an actuary.”
“What makes you say that?” asked the hiker.
The skydiver answered, “Because what you just told me was 100% accurate, but totally worthless!”
CEILING ON ESI MEDICAL REIMBURSEMENTS TO GO
Thiruvananthapuram: The ceiling on medical reimbursement to family members of workers covered under the ESI Scheme for treatment done outside ESI hospitals will be lifted.
Labour Minister P.K. Gurudasan said here on Monday that the Union government had approved a proposal of the State government in this regard. Besides, agreements would be signed with outside hospitals for direct reimbursement of bills. The ceiling was Rs.1 lakh for family members, while no ceiling was specified for the member of the Scheme (worker).
He said facilities at super-specialty hospitals of the ESI Corporation would be upgraded. Besides, more government, quasi-government and private hospitals would be enlisted to provide super-specialty services to patients referred by ESI dispensaries and hospitals. The Corporation had authorised the State Medical Commissioner to enter into an agreement with hospitals in this regard, and direct payment of bills.
Mr. Gurudasan said the proposed medical college under the ESI Corporation at Parippally in Kollam district was expected to start functioning from the next academic year. The Corporation had applied for the affiliation of the University of Kerala. The State government was in the process of issuing NOC to the college. He said the government had requested the Corporation that seats be reserved in the college for family members of workers covered under the ESI Scheme.
He said the Corporation had also completed a feasibility study for starting nursing schools in the State. The State government had sought opening of four schools (Ezhukone, Udhyogamandal, Peroorkada and Feroke).
He said hospital development committees were being formed at the ESI hospitals as per the decisions of the Corporation. These committees would be empowered to spend Rs.25 lakh to Rs.40 lakh for hospital development depending on the number of beds. Mr. Gurudasan said after the LDF government came to power, several steps had been taken to improve the infrastructure facilities under the ESI scheme.
Labour Minister P.K. Gurudasan said here on Monday that the Union government had approved a proposal of the State government in this regard. Besides, agreements would be signed with outside hospitals for direct reimbursement of bills. The ceiling was Rs.1 lakh for family members, while no ceiling was specified for the member of the Scheme (worker).
He said facilities at super-specialty hospitals of the ESI Corporation would be upgraded. Besides, more government, quasi-government and private hospitals would be enlisted to provide super-specialty services to patients referred by ESI dispensaries and hospitals. The Corporation had authorised the State Medical Commissioner to enter into an agreement with hospitals in this regard, and direct payment of bills.
Mr. Gurudasan said the proposed medical college under the ESI Corporation at Parippally in Kollam district was expected to start functioning from the next academic year. The Corporation had applied for the affiliation of the University of Kerala. The State government was in the process of issuing NOC to the college. He said the government had requested the Corporation that seats be reserved in the college for family members of workers covered under the ESI Scheme.
He said the Corporation had also completed a feasibility study for starting nursing schools in the State. The State government had sought opening of four schools (Ezhukone, Udhyogamandal, Peroorkada and Feroke).
He said hospital development committees were being formed at the ESI hospitals as per the decisions of the Corporation. These committees would be empowered to spend Rs.25 lakh to Rs.40 lakh for hospital development depending on the number of beds. Mr. Gurudasan said after the LDF government came to power, several steps had been taken to improve the infrastructure facilities under the ESI scheme.
Source: The Hindu
BOMBED OUT OF SLUMBER, AMC TO GET INSURANCE COVER FOR ITS BUSES
Ahmedabad: Ahmedabad has borne the brunt of both man-made and natural disasters in the recent past, taking a toll on both life and property. Over the years, the city has grown by leaps and bounds, adding public assets worth billions to its pride; a host of bridges, installations like pumping stations, water tanks, hospitals and other buildings to name a few. But curiously, none of these have an insurance cover against sabotage or damage due to terror attacks even as the threats loom larger than ever before.Now, the Ahmedabad Municipal Corporation (AMC) is considering whether to provide an insurance cover to its much-hyped Bus Rapid Transit System (BRTS). AMC standing committee chairman Asit Vora said the general view that installations like bridges and other buildings do not require insurance cover is possibly because of the high premium involved, which often acts as a deterrent. "There has never been any insurance cover for all these structures and we do not see any need for it,” said Vora.
Incidentally, the civic body has also not gone for the insurance of its city buses because of the high premium involved. Also, it finds it convenient to pay compensation as and when accidents occur rather than pay the high premium regularly. But in view of the recent terror attack, the AMC is considering an insurance cover for the BRT installations in the city, said BRT in-charge D Thara.
As a matter of precaution, the civic authorities, with the help of the police, recently had the installations checked thoroughly, when it received threat calls, which later turned out be hoaxes. Insurance experts opine that the civic body is a government in itself and there is no need for it to get its installations insured. “The government is exempted from getting its assets insured … if work on some project is in progress, the contractor may go for the insurance of that project to cover the risk on investment,” said Ajay Dave, an insurance surveyor in the city.
He said the government has been in insurance cover activity to the extent of group insurance of persons like students in schools, employees and labourers under the social security schemes.
Source: The Indian Express
ICICI PRU, IIM-C TIE UP
ICICI Prudential Life Insurance has tied up with the Indian Institute of Management, Calcutta, (IIM-C) to launch a 10-month executive program in insurance and management. The graduates -- 80-100 in the first batch -- who are able to successfully complete the course will be offered frontline managerial posts at ICICI Prudential.
"We need a ready pool of talent and tying up with academic institutions is the way out," said Judhajit Das, chief, human resources, ICICI Prudential Life Insurance, the largest private life insurer in the country. "We play a pioneering role in designing courses to suit various industries. This program is designed to create a pool of talent for the life insurance industry," said Prof Saibal Chattopadhyay, dean, IIM-Calcutta.
The classes, to be held at IIM-C's Harrington Mansions address in the city, will begin from August. The selection process will include an aptitude test and group discussion followed by an interview. Once the student has cleared the process, s/he will be signed up for the program and will be handed an offer letter from ICICI Prudential on the first day of the program.
Prof Ashok Banerjee, architect of the course, said it took him almost a year to devise the program. "The non-residential program is divided into 21 courses over three terms. Each course shall have 30 hours of classroom teaching," he added. Ten members of the IIM faculty will be a part of the program.
"We need a ready pool of talent and tying up with academic institutions is the way out," said Judhajit Das, chief, human resources, ICICI Prudential Life Insurance, the largest private life insurer in the country. "We play a pioneering role in designing courses to suit various industries. This program is designed to create a pool of talent for the life insurance industry," said Prof Saibal Chattopadhyay, dean, IIM-Calcutta.
The classes, to be held at IIM-C's Harrington Mansions address in the city, will begin from August. The selection process will include an aptitude test and group discussion followed by an interview. Once the student has cleared the process, s/he will be signed up for the program and will be handed an offer letter from ICICI Prudential on the first day of the program.
Prof Ashok Banerjee, architect of the course, said it took him almost a year to devise the program. "The non-residential program is divided into 21 courses over three terms. Each course shall have 30 hours of classroom teaching," he added. Ten members of the IIM faculty will be a part of the program.
Source: The Hindu Business Line
AVIVA LAUNCHES PENSION AND MONEY BACK PLAN
New Delhi: Private sector insurer Aviva Life Insurance on Monday launched traditional pension plan and money back plan with periodical lump-sum benefits. Secure Pension plan has been designed with the objective to encourage regular savings for policyholders and ensure pension during the retired life, Aviva told the media. The money back plan is the only product in the market with policy term options of 12, 15, 18 and 21 years, it said. Both polices are endowment with profit plans, it added. "We have had an extremely robust portfolio of unit-linked products and close to 95 per cent of our sales come from this segment. As we expand into tier 3 and 4 towns, we see an increased demand for traditional products with guaranteed returns," said Aviva India Managing Director Bert Paterson. Aviva Life Insurance is a 74:26 joint venture between Dabur and UK-based Aviva Plc with paid up capital to Rs 1,004.3 crores.Source: PTI, The Economic Times, The Hindu Business Line
HDFC STANDARD LIFE LAUNCHES UNIT-LINKED WEALTH MAXIMISER PLUS
Mumbai: HDFC Standard Life on Monday said it has launched its Unit Linked Wealth Maximiser Plus, a single premium investment-cum-protection plan with a minimum premium of Rs 1 lakh. It offers flexibility of investing in five funds Money plus, Bond Opportunities, Large-cap, Mid-cap and Manager's fund. Its key features of the fund include an one-time investment at the start of the policy and cover till the age of 99-years, the media reported. HDFC Standard Life's Managing Director and CEO, Deepak Satwalekar said: "Wealth Maximiser Plus is the first unit- linked product in the Indian life insurance industry to offer the opportunity of investing in Manager's Fund, a fund that offers dynamic exposure between other equity and debt-type funds."Source: PTI, The Economic Times, The Hindu Business Line
BANCASSURANCE SEES STEADY, BRISK GROWTH
Hyderabad: The bancassurance segment in the insurance industry has been growing at a steady pace and is competing with the traditional sale of insurance by agents. The growth of this channel is also quite phenomenal in the business of major life insurers such as Life Insurance Corporation of India (LIC) and SBI Life.
“`We are quite happy with the way in which bancassurance is growing. The sales through this channel registered an of about 60 per cent in 2007-08, Mr Surya Roy, Executive Director and Head of Bancassurance at LIC, told Business Line over phone from Mumbai while declining to give exact figures.
In the case of SBI Life, the integrated bancassurance business increased over 100 per cent to Rs 2,000 crore in a total business of Rs 5,6000 crore. ``This year too, we are expecting a similar growth in this segment,” Mr Uday Shankar Roy, CEO and Managing Director, SBI Life Insurance, said.
``In the next two/three years, the share of bancassurance is bound to grow as there is realisation among the banks and insurers that there is untapped insurance potential in the customers of a bank. The keenness of many a bank to augment other income (fee-based income) in view of growing pressure of margins will also drive this,” he said.
Big driver
Agrees Mr R Krishnamurthy, Managing Director of Watson Wyatt Insurance Consulting Ltd, which had conducted a study on bancassurance. ``A key feature of bank sales of insurance policies is that foreign banks and new generation private banks account for 60 per cent of the premium. Public sector banks, which account for three fourth of the banking system, have been slow to realise the benefits of cross selling insurance to customers. They are doing it now and this itself is a big driver,” he said.
ULIPs favoured
The bancassurance premiums are also substantially by sale of unit-linked policies. The proportion of term insurance - the pure protection component of life insurance business - is very low, at less than 10 per cent of the total.
“This reflects that the benefit of banking network in terms of enhancing the insurance penetration levels in the country to the various population segments is yet to be realised to a major extent,” Mr Krishnamurthy observed.
The total new business premium generated by life companies for the year ended March 2008 is about Rs 56,400 crore, of which about 24 per cent or Rs 13,500 crore was generated by bank branches, he added.
“`We are quite happy with the way in which bancassurance is growing. The sales through this channel registered an of about 60 per cent in 2007-08, Mr Surya Roy, Executive Director and Head of Bancassurance at LIC, told Business Line over phone from Mumbai while declining to give exact figures.
In the case of SBI Life, the integrated bancassurance business increased over 100 per cent to Rs 2,000 crore in a total business of Rs 5,6000 crore. ``This year too, we are expecting a similar growth in this segment,” Mr Uday Shankar Roy, CEO and Managing Director, SBI Life Insurance, said.
``In the next two/three years, the share of bancassurance is bound to grow as there is realisation among the banks and insurers that there is untapped insurance potential in the customers of a bank. The keenness of many a bank to augment other income (fee-based income) in view of growing pressure of margins will also drive this,” he said.
Big driver
Agrees Mr R Krishnamurthy, Managing Director of Watson Wyatt Insurance Consulting Ltd, which had conducted a study on bancassurance. ``A key feature of bank sales of insurance policies is that foreign banks and new generation private banks account for 60 per cent of the premium. Public sector banks, which account for three fourth of the banking system, have been slow to realise the benefits of cross selling insurance to customers. They are doing it now and this itself is a big driver,” he said.
ULIPs favoured
The bancassurance premiums are also substantially by sale of unit-linked policies. The proportion of term insurance - the pure protection component of life insurance business - is very low, at less than 10 per cent of the total.
“This reflects that the benefit of banking network in terms of enhancing the insurance penetration levels in the country to the various population segments is yet to be realised to a major extent,” Mr Krishnamurthy observed.
The total new business premium generated by life companies for the year ended March 2008 is about Rs 56,400 crore, of which about 24 per cent or Rs 13,500 crore was generated by bank branches, he added.
Source: The Hindu Business Line
ADITYA NUVO Q1 NET LOSS AT RS 28 CR ON INSURANCE BIZ.
Diversified company Aditya Birla Nuvo, part of the Aditya Birla group, slipped into red as its life insurance business incurred higher losses thereby offsetting the comparatively better performances made in other divisions.The over Rs 12,000-crore Birla firm posted a consolidated net loss of Rs 28.3 crore for the quarter ended June 30 as against a net profit of Rs 94.7 crore in the corresponding quarter last year. The company, which have its operations in sectors such as telecom, insurance, textiles and BPO, recorded net sales of Rs 3,228.30 crore, up 48 per cent, as compared to Rs 2,184.1 crore last year.
"The fall in net profit was largely due to higher loss in the life insurance business," the company said in a statement.
Source: Business Standard, The Tribune, Deccan Chronicle
PRIVATE INSURERS EAT INTO PSUS’ NON-LIFE SHARE
Mumbai: State-owned non-life insurance companies have lost further market share in the first quarter of 2007-08, as the industry slowly adjusts to a free-pricing market. The slower growth among state-owned companies has resulted in ICICI Lombard displacing public sector Oriental Insurance to become the fourth-largest insurer in India. In the first quarter, non-life insurance has grown 13.4%, taking the total premium to Rs 8,437 crore, up from Rs 7,438 crore in the corresponding quarter last year. The growth has largely come from private companies which have grown 22.4% against public sector companies which have grown much slower at 7.7%.
Unlike life insurance where government presence is through the monolithic Life Insurance Corporation (LIC), the government owns four companies in non-life — New India, Oriental Insurance, National Insurance and United India. The state-owned companies now account for 58% of non-life premium compared with 61% a year ago. Unlike life insurance, which has seen a complete change in the ranking of insurers in terms of topline, the non-life insurance has been steady. Besides, United India and ICICI Lombard, MS Cholamandalam and Royal Sundaram are the only two companies to trade places in the ranking list. The highest growth rates have been recorded by Cholamandalam (35%), followed by Iffco-Tokio (33%), Tata AIG (28.12%) and Bajaj Allianz (27.85%). Reliance General Insurance, which was the fastest growing company last year, has grown slower than the industry with a 5.2% rise in premium income.
State-owned companies have recorded a lower growth because of hectic competition for property insurance which has seen them retain old business at sharply reduced rates. Priavte companies have been very aggressive in acquiring motor insurance business through tie-ups with dealership. Motor together with health insurance have been the drivers of growth in the non-life insurance industry. During the course of the year private companies have made large investments in distribution and intermediaries. Also several new companies have entered the fray. The new companies that have received licence include Future Generali, Universal Sompo, Shriram General Insurance and Bharti Axa General Insurance. HDFC Ergo General Insurance, which fell behind last year as HDFC broke up with erstwhile partner Chubb, is expected to press ahead this year.
Unlike life insurance where government presence is through the monolithic Life Insurance Corporation (LIC), the government owns four companies in non-life — New India, Oriental Insurance, National Insurance and United India. The state-owned companies now account for 58% of non-life premium compared with 61% a year ago. Unlike life insurance, which has seen a complete change in the ranking of insurers in terms of topline, the non-life insurance has been steady. Besides, United India and ICICI Lombard, MS Cholamandalam and Royal Sundaram are the only two companies to trade places in the ranking list. The highest growth rates have been recorded by Cholamandalam (35%), followed by Iffco-Tokio (33%), Tata AIG (28.12%) and Bajaj Allianz (27.85%). Reliance General Insurance, which was the fastest growing company last year, has grown slower than the industry with a 5.2% rise in premium income.
State-owned companies have recorded a lower growth because of hectic competition for property insurance which has seen them retain old business at sharply reduced rates. Priavte companies have been very aggressive in acquiring motor insurance business through tie-ups with dealership. Motor together with health insurance have been the drivers of growth in the non-life insurance industry. During the course of the year private companies have made large investments in distribution and intermediaries. Also several new companies have entered the fray. The new companies that have received licence include Future Generali, Universal Sompo, Shriram General Insurance and Bharti Axa General Insurance. HDFC Ergo General Insurance, which fell behind last year as HDFC broke up with erstwhile partner Chubb, is expected to press ahead this year.
Source: The Economic Times
J Hari Narayan IRDA Chairman's first Interview
Insurers will get more options to invest in bonds
Changes in investment norms will ensure better returns for policyholders, IRDA chief Hari Narayan tells Hema Ramakrishnan
J Hari Narayan, the new chairman of Insurance Regulatory and Development Authority (IRDA), takes charge at a challenging phase, when the government is keen on pushing a legislation to increase the Foreign Direct Investment (FDI) in the insurance sector. Given the impressive growth in the life industry, the stage is all set for the next phase of reforms. The non-life industry is also set for a take-off. In his first interview after taking over, Mr Narayan dwelt on a range of issues in the insurance sector and the road ahead.
Do you expect several new entrants in the sector when the cap on FDI in insurance is hiked from 26% to 49%?
A large number of private players are already operating life and general insurance sectors.
Had the size of investment been an inhibiting factor, they would not have come in. I do not
expect several new players to rush for joint venture tie-ups if the cap on FDI in insurance is
raised. But existing players may increase their stake, which, in turn, will enhance FDI inflows.
Capital has so far not been a major constraint for the insurance industry, given the way they
have been expanding their business. Some Indian promoters have restructured their joint
ventures to expand their relative shareholding in the company. This is, perhaps, reflective of
their relative strength. But insurers need capital to meet unexpected claims, expense overruns
and investment losses. And we do see some strain among Indian partners in raising capital
whenever there is a call for greater shareholder funds. A hike in the FDI cap would help then.
Also, comprehensive changes in the insurance legislation will give IRDA flexibility to respond to
emerging market developments.
Promoters of private insurance companies were expected to dilute their shareholding through an initial public offering within 10 years of operations. Is this timeline being reviewed?
The dilution of equity stake would hinge on the final decision on the FDI cap. As the market
matures, the insurance sector would also witness churning in the form of mergers and
acquisitions (M&As). A realistic valuation of companies would be crucial. We need to do some
homework on these issues and are looking at setting up an expert group.
The hike in interest rates and downslide in the stock market have seen a dip in sales of Unit-Linked Insurance Plans. Are you concerned about it?
A rise in yields may yield better returns on fixed income plans. But Ulip sales have dipped,
which is reflected in the first quarter numbers. The data show a drop in the new business
premium of LIC. However, private companies have recorded a higher growth. The average
growth for the life insurance industry is around 14%. But these are dull months. The investment
risks in Ulips are borne entirely by the investor channelling his longterm savings in the equity
market. We will make exposure norms mandatory for Ulips to mitigate the risks arising from
investments in a few companies.
How are you tackling complaints on misselling of Ulips?
We have made it mandatory for companies to give a break-up of the charges in Ulips and the exact amount that will be available for investment during the premium payment period. The policyholder and the marketing official selling the product have to sign the premium-cum-charges statement. Any change in the charges while under-writing or finalising
the deal also has to be approved by the policy holder. We will also codify all complaints from
consumers buying insurance products systematically to have a proper data base.
Are you acting on the recommendations of the panel to provide cheaper mediclaim?
What are the core issues in health insurance?
Voluntary health insurance policies such as mediclaim come up for renewal annually.
Companies can look at a longer-renewal period. Can we have medium and long-term health
insurance products? We also need to look at actuarial issues in the pricing health insurance
products. Can we draw from countries such as Brazil and Chile that have advanced health
insurance schemes?
When will you change the investment regulation norms for insurers?
We are planning to notify the changes in investment norms shortly to give greater flexibility
to insurers to invest in debt and equity instruments. Insurance companies will be given more
options to invest in bonds floated by infrastructure companies. They will also have the leeway to
invest in mortgage-backed securities. The changes will also ensure better returns for
policyholders.
When will general insurers be given the freedom to innovate and offer composite
products?
The issue here is one of tariff wordings. The General Insurance Council (GIC) is ready with
common tariff wordings, but a section of the industry reckons that there could be scope for
misunderstanding in some terms and expressions used. GIC has been asked to take a relook at
this. The new tariff wordings will be ready by the end of this year. We will remove impediments,
if any, to product innovation.
Will you allow banks to have tie-ups with multiple insurers?
Banks are allowed to tie up now only with one company in life and one in general insurance.
One option is to have open architecture which would mean giving banks the flexibility to act as
a corporate agent for multiple insurers. We also need to have more professional insurance
agents to deepen insurance penetration in the country.
Are you looking at a risk-based capital model for the insurance sector?
Insurance companies have to transit to a risk-based model in future. This transition and the
adoption of International Financial Reporting Standards (IFRS) by 2011 have several
commonalities.
It will equip companies to handle future accounting standards and also have proper risk
management systems. When Indian insurers adopt this model, known as Solvency II, they
would have to set aside much less capital than they do now, say, for (Ulips) compared with
traditional insurance products.
Changes in investment norms will ensure better returns for policyholders, IRDA chief Hari Narayan tells Hema Ramakrishnan
J Hari Narayan, the new chairman of Insurance Regulatory and Development Authority (IRDA), takes charge at a challenging phase, when the government is keen on pushing a legislation to increase the Foreign Direct Investment (FDI) in the insurance sector. Given the impressive growth in the life industry, the stage is all set for the next phase of reforms. The non-life industry is also set for a take-off. In his first interview after taking over, Mr Narayan dwelt on a range of issues in the insurance sector and the road ahead.
Do you expect several new entrants in the sector when the cap on FDI in insurance is hiked from 26% to 49%?
A large number of private players are already operating life and general insurance sectors.
Had the size of investment been an inhibiting factor, they would not have come in. I do not
expect several new players to rush for joint venture tie-ups if the cap on FDI in insurance is
raised. But existing players may increase their stake, which, in turn, will enhance FDI inflows.
Capital has so far not been a major constraint for the insurance industry, given the way they
have been expanding their business. Some Indian promoters have restructured their joint
ventures to expand their relative shareholding in the company. This is, perhaps, reflective of
their relative strength. But insurers need capital to meet unexpected claims, expense overruns
and investment losses. And we do see some strain among Indian partners in raising capital
whenever there is a call for greater shareholder funds. A hike in the FDI cap would help then.
Also, comprehensive changes in the insurance legislation will give IRDA flexibility to respond to
emerging market developments.
Promoters of private insurance companies were expected to dilute their shareholding through an initial public offering within 10 years of operations. Is this timeline being reviewed?
The dilution of equity stake would hinge on the final decision on the FDI cap. As the market
matures, the insurance sector would also witness churning in the form of mergers and
acquisitions (M&As). A realistic valuation of companies would be crucial. We need to do some
homework on these issues and are looking at setting up an expert group.
The hike in interest rates and downslide in the stock market have seen a dip in sales of Unit-Linked Insurance Plans. Are you concerned about it?
A rise in yields may yield better returns on fixed income plans. But Ulip sales have dipped,
which is reflected in the first quarter numbers. The data show a drop in the new business
premium of LIC. However, private companies have recorded a higher growth. The average
growth for the life insurance industry is around 14%. But these are dull months. The investment
risks in Ulips are borne entirely by the investor channelling his longterm savings in the equity
market. We will make exposure norms mandatory for Ulips to mitigate the risks arising from
investments in a few companies.
How are you tackling complaints on misselling of Ulips?
We have made it mandatory for companies to give a break-up of the charges in Ulips and the exact amount that will be available for investment during the premium payment period. The policyholder and the marketing official selling the product have to sign the premium-cum-charges statement. Any change in the charges while under-writing or finalising
the deal also has to be approved by the policy holder. We will also codify all complaints from
consumers buying insurance products systematically to have a proper data base.
Are you acting on the recommendations of the panel to provide cheaper mediclaim?
What are the core issues in health insurance?
Voluntary health insurance policies such as mediclaim come up for renewal annually.
Companies can look at a longer-renewal period. Can we have medium and long-term health
insurance products? We also need to look at actuarial issues in the pricing health insurance
products. Can we draw from countries such as Brazil and Chile that have advanced health
insurance schemes?
When will you change the investment regulation norms for insurers?
We are planning to notify the changes in investment norms shortly to give greater flexibility
to insurers to invest in debt and equity instruments. Insurance companies will be given more
options to invest in bonds floated by infrastructure companies. They will also have the leeway to
invest in mortgage-backed securities. The changes will also ensure better returns for
policyholders.
When will general insurers be given the freedom to innovate and offer composite
products?
The issue here is one of tariff wordings. The General Insurance Council (GIC) is ready with
common tariff wordings, but a section of the industry reckons that there could be scope for
misunderstanding in some terms and expressions used. GIC has been asked to take a relook at
this. The new tariff wordings will be ready by the end of this year. We will remove impediments,
if any, to product innovation.
Will you allow banks to have tie-ups with multiple insurers?
Banks are allowed to tie up now only with one company in life and one in general insurance.
One option is to have open architecture which would mean giving banks the flexibility to act as
a corporate agent for multiple insurers. We also need to have more professional insurance
agents to deepen insurance penetration in the country.
Are you looking at a risk-based capital model for the insurance sector?
Insurance companies have to transit to a risk-based model in future. This transition and the
adoption of International Financial Reporting Standards (IFRS) by 2011 have several
commonalities.
It will equip companies to handle future accounting standards and also have proper risk
management systems. When Indian insurers adopt this model, known as Solvency II, they
would have to set aside much less capital than they do now, say, for (Ulips) compared with
traditional insurance products.
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