50 PER CENT SUBSIDY FOR CROP INSURANCE

Tiruchi: About 557 acres of banana, 476 acres of tapioca and 3,108 acres of onion crops in Tiruchi district would be brought under the crop insurance scheme implemented with 50 per cent government subsidy, according to Deputy Director of Horticulture S.Robert Vincent.

Banana-growers in Musiri, Andhanallur, Lalgudi, Tiruverambur and Manachanallur taluks, tapioca growers in Thuraiyur and Uppilliyapuram taluks and onion-growers in Manachanallur, Thuraiyur, Uppilliyapuram, Thottiyam and Pullampadi taluks can avail of the scheme.

In a press release, Mr.Vincent said that farmers who had obtained crop loans from banks would be eligible for a subsidy of 50 per cent on the premium for the insurance cover and those who have not taken loans would be eligible for 55 per cent. Farmers could obtain information about the scheme from horticulture officers.

He disclosed that about 428 hectares would be covered under vegetable crops under the Integrated Horticulture Development Scheme in the district. Under the scheme, farmers would be provided quality seeds at 50 per cent subsidy. The seeds were being distributed through the assistant directors of horticulture and horticulture field officers.

Mr.Vincent also stated that quality seedlings and saplings of various horticulture crops were available at the Horticulture Farm functioning at Mudalaipatti on the Tiruchi-Thogamalai Road. Farmers and public could purchase seedlings of sapotta, tamarind, amla, lemon, guava, teak, bamboo, jack fruit, curry leaf, eucalyptus, jasmine and other decorative plants.

Source: The Hindu

FARM COVER: DEADLINE EXTENDED

Hyderabad: The Union Ministry of Agriculture has agreed to extend the cut-off date to August 16 for submission of insurance proposals by farmers who have not taken loans for this kharif season. The Ministry, however, put some conditions for farmers to be eligible for the scheme.

The extension would be applicable only to crops sown during the extended period (after July 31, 2008). The condition of crop on the date of submission of proposal should be normal. The banks would be asked to accept the proposals of only farmers without loans furnishing the area sown certificate, a Government of Andhra Pradesh press release said.

Source: The Hindu Business Line

INSURERS BET ON INNOVATION

Mumbai: You do not need to go to the insurance agent to insure your car, health, travel or house, as you can buy it over phone. General insurance companies are coming up with innovative products offering a variety of services as competition in the industry picks up. There is also one company which offers free cover from terrorist attack to the first one lakh applicants.

India’s largest private general insurance company ICICI Lombard has silently launched first-of-its kind, mobile commerce service. Using this service a customer can buy the insurance cover using his mobile phone. While elaborating on the innovation Ms Vishakha Mulye, executive director, ICICI Lombard, said "In India, insurance products are available at low costs, but there are supply side constraints. Insurance companies are not reaching to the masses but technology and innovation holds the key for a change."

To meet this, the company has made insurance products available through mobile phones, said Ms Mulye. Customers will be able to choose the product, pay the premium using a credit card and get the insurance immediately. Later on, they could get the print out of the policy from website as well.

So, for a consumer going abroad it will take minutes to get the travel insurance cover two hours before he boards the plane, explains Ms Mulye. Innovation is helpful for students learning abroad as well. ICICI Lombard offers personalised insurance schemes to students, which match the requirements of their respective universities. To cater to this segment, the company has tied up with 500 universities across the world.

Bajaj Allianz General Insurance Company is also using mobile service for renewals, reminders, SMS alerts and other host of services, said a company spokesperson. As on today, the company is offering the option of online service, but it is looking for more innovative options, he said.

Another example of innovation is the offer of free insurance cover against terrorist attack for the first one lakh people who accept the offer. Mr Rahul Agarwal, managing director and CEO, Optima Insurance Brokers Pvt. Ltd said after the Jaipur bomb blasts it was seen that the many affected families had not received the compensation declared by the government. To fill this void, Optima Insurance tied up with New India Assurance and offered cover of Rs 1 lakh for free for the first 1 lakh people who sign up across India, he said. To avail this insurance policy one only needs to go to the website and apply to get the cover from terrorist attack.

In the last two weeks, 15,000 Indians have taken advantage of the scheme and many more are expected to do the same, said Mr Agarwal.

Source: Asian Age

INVESTORS CONTINUE TO PREFER ULIPs: SHIKHA SHARMA

With the government focus shifting to reforms, insurance sector could be a big beneficiary. In an exclusive interview, ICICI Prudential managing director Shikha Sharma tells ET about the state of the industry and a possible hike in the FDI limit for the sector. She feels that an increase in the limit, to 49%, would help Indian companies build a stronger and long-term relationship with their foreign partners. Excerpts:

Do you see insurance reforms happening anytime soon, now that the UPA is no longer dependent on the Left?

With the UPA winning the trust vote, it is reasonable to expect the government will pursue reformist policies more vigorously than it did in the past four years. But I think it may take some time before the final Act is passed on these lines. In fact I am less optimistic about it happening immediately as the government may first want to look at tackling some of the larger issues such as inflation. However, once the appropriate regulatory structure is in place, the industry is likely to witness consolidation. The sector is relatively new and there are currently about 18 players of which some are still small. Reforms may eventually lead to fewer but stronger players in the country.

Has the low FDI limit imposed any capital constraints on you? Do you plan to expand your capital base this year?

We plan to boost our operation and for that we definitely need to put in more money. But that is a part of our annual exercise. Our current capital base is around Rs 4,272 crore. We see India’s rural areas as the next big opportunity as the growth there is almost 13-14% compared to the metros, which are witnessing about 7% growth. We are already in talks with MFIs and NGOs to boost our penetration in rural India. Apart from strengthening our presence in the villages, we also plan to foray into the international market. West Asia has good potential as we see a demand for rupee-based products there. We have a representative office there, which promotes our brand. We are in the process of completing the regulatory requirement in India and applying for a licence for a full-fledged office in west Asia.

Will the sharp rise in inflation and the stock market slump dampen appetite for insurance products?

Insurance companies have managed to record a decent growth in this financial year so far, but sales do appear to be easing. Although our product profile hasn’t changed much, the industry has seen a marginal shift away from unit linked plans (ULIP) to traditional products. The insurance sector managed around 20% growth in the first quarter of this year compared to the corresponding period last year that saw over 30% growth. Although the industry hasn’t faced any negative growth so far, there has certainly been a mild deceleration in growth.

Has the volatility in the stock market affected the demand for ULIPs?

ULIPs have so far have been the main channel for retail investment in the stock market and comprise about 85-90% of the overall products of the insurance sector. There has been some drop in investment in ULIPs but I would say it is more like a blip. In fact, in the months to come, ULIPs will continue to be the preferred alternative for investors. For those who are not concerned about the short-term volatility in stocks, I would say this is the right time to buy. Also, while market returns are important, ULIPs cover a variety of needs, and are flexible and transparent. I do not foresee any switch from ULIPs in the long-term.

How have the first-time premium collections grown of late? Has the global slowdown or subprime crisis had any impact on the insurance sector in India?

Premium from new policies has fallen for the insurance industry in the last few months but as I said earlier, it is more like a blip. While there has been a deceleration of growth in the equity-linked and mutual fund-related products, the life insurance industry has seen a sudden jump in sales in the recent past. The global slowdown hasn’t had an impact on insurance companies in India. The industry is relatively new and it’s not dependent on the global economy.

What is your outlook for the stock market? Do you see any sharp recovery?

The stock market has witnessed a lot of fluctuation this year, after touching an all-time high in early January. Such high levels of volatility make it difficult to predict the future. But as far as I think, markets will take some time, may be eight to 12 months, to revive.

Source: The Economic Times

NOW, GET PRE-PAID, TOP-UP INSURANCE CARDS FROM NEIGHBOURHOOD SHOP

Mumbai: Even as the financial services industry looks at emulating the success of mobile telephony in market penetration, Max New York Life has taken the analogy one step further. The Delhi-based life insurance company has introduced the concept of pre-paid insurance card, which will be sold to distributors for onward retaili

ng. The company proposes to invest up to Rs 400 crore in this special project and has roped in IBM to provide the technology backbone. For the first time, the company will be issuing individual insurance contracts issued on the spot, through hand-held thermal printers which will connect to the back-end through cellphone networks. The similarity with the mobile business does not end with the pre-paid card. Max’s distribution strategy is also similar to the one followed by the mobile industry. The company plans to stock retail stores in small cities and semi-urban areas with a start-up package which comes in three denominations and offers five times the sum insured. The cost of the package ranges from Rs 1,000 to Rs 2,500. The money can also be topped up or withdrawn. However, there is a lock-in period of three years for withdrawal. The subsequent top-ups can be for values as low as Rs 10. Speaking to ET, Max New York Life chairman Analjit Singh said that with retail margins coming under pressure those retailers who have missed out on an opportunity to distribute mobile telephony services would be keen to distribute insurance. Mr Singh was among the earliest investors in the mobile telephony business having promoted Max Telecom, which he later sold to Hutchison, which, in turn, sold the business to Vodafone.

Mr Singh said that as the earnings of the policyholders improved, Max would aim to upsell them regular savings and investment products. “We have seen the mobile telephony market move from largely post-paid to a pre-dominantly pre-paid one. Now, the market is slowly moving towards post-paid again. We expect a similar move in insurance as well,” said Mr Singh. According to Max New York Life Sr director Anil Mehta, who heads the new markets strategic business unit, the plan, which has been christened Max Vijay, would be launched from Uttar Pradesh and extended across the country.

Source: The Economic Times

REGULATOR SOUGHT FOR NBFCs

New Delhi: The task force on Non-Banking Financial Companies (NBFCs) that was carried out by industry association Ficci, has recommended the urgent need for an Insurance Regulatory Development Authority (IRDA)-type of developmental authority that will unfetter NBFCs from stifling regulations and stimulate their growth, with the larger objective of achieving financial inclusion in the economy.

The development of NBFCs will help develop rural and semi-urban segments of India, increase investment in agriculture, develop self-employment opportunities, create equal employment opportunities and economically empower women and backward groups.

According to the task force, it is important to recognise the fact that proximity to customers, knowledge of customer needs, efficient credit delivery methods, setting up cost-effective distribution networks, and the innovativeness are the hallmark of NBFCs. This was informed by the task force chairman M.S. Verma, former chairman, SBI & TRAI.

“These attributes are crucial in bringing about holistic economic development, with sufficient dispersion of risk amongst all financial sector entities. It is, therefore, imperative that regulation and development of NBFCs are in tandem in order to provide right environment and help the sector perform to its optimum potential”, he added.

The report states that a regulatory policy for NBFCs should look at the wider canvass that take cognisance of the role and relevance of the sector in view of the need for financial inclusion and effective credit delivery mechanisms, removing inequitable restrictions and creating a level playing field vis-à-vis banks.

Besides, it should establish a long-term framework enabling players in the sector to evolve long-term strategies to ensure stable growth and less likelihood of crisis and lead to closer consultation with representative bodies while formulating new regulations.

Source: The Tribune

REINSURERS TO GET EASIER ENTRY

New Delhi: The insurance amendment bill, slated to be vetted by an empowered group of ministers soon, has been reworked considerably with changes in listing norms and relaxation in prescribed norms for reinsurance companies. The bill seeks to increase the foreign direct investment (FDI) limit in the insurance sector to 49%. Foreign reinsurance companies are likely to be allowed to set up branch offices here without entering into joint venture partnership with Indian firms. The government would also work out a favourable tax structure for such companies. The government may relax the norms related to mandatory listing of all insurance companies within 10 years of their operations as the clause is being termed as impractical. “For listing purposes, companies need profitability for at least three consecutive years. It would be impractical to force any company to shut operations if they do not attain profitability for a certain period, so the clause needs to be amended,” an official source said. The government would, however, make it mandatory for all the companies to get registered as public limited entities within one year of the Act comes into place. The group of ministers (GoM) is likely to meet later this week or early next week to take a final call on all the issues. “We may allow the foreign reinsurers to set up their independent branch offices in India,” an official in the finance ministry said. The new entrants would have to show a net owned asset of about Rs 5,000 crore to start operations. “We are still working on the exact amount of net owned asset to be stipulated for such companies,” the official said. This amount would be periodically revised also. Presently General Insurance Company (GIC) is the only reinsurer in the country. The company had a net owned fund of Rs 4,822 crore as on March 31, 2006. Global asset base of GIC as on March 31, 2006 stood at Rs 27,038 crore. Entry of foreign players in the reinsurance segment would benefit the general, life and health insurance companies who would be able to negotiate better premium. With the passage of the proposed amendment, foreign companies including Lloyd’s of United Kingdom (UK), can set up its branches in the country.

Source: The Economic Times

IRDA MAY ENSURE AFFORDABLE HEALTH COVER TO ALL, EVEN AFTER 65 YEARS

Hyderabad: Senior citizens have good chances of getting a health cover even after they turn 65. Insurance regulator IRDA is vetting a proposal to make health cover affordable to all senior citizens. A final view will be taken on providing guaranteed access to health insurance for this segment by the end of this year, said a top official of the regulatory body. The proposal is based on the recommendations of an expert panel on health insurance last year. The panel recommended allowing senior citizens to enter the health insurance system up to 65 years of age — or higher — at the discretion of the insurer.

If they do so, they should be given guaranteed renewal of their insurance without any upper age limit. As a transitional measure — since guaranteed access is being provided to senior citizens for the first time — there should be no upper age limit for entry or renewal for a period of three years from the date the IRDA issues the regulations”, the panel had said. It had made out a case for insurers to fix a “base” price of Rs 3,000 every year for a sum insured of Rs 1,00,000 (at 50 years). “We are examining these recommendations of the panel we reckon that health insurance should be made affordable, given the mounting health care-costs,” said DVS Sastry, director general, IRDA at a seminar on effective cross selling of insurance and mutual fund products organised by Watson Wyatt and the Indian Institute of Banking and Finance here. Several senior citizens have registered complaints with the regulator about insurance companies denying renewals. Industry experts, however, reckon that people should enter health insurance schemes at an early age to enable insurance companies distribute their risks better. Currently, health insurance penetration is minuscule in India. The total premium from health insurance stood at Rs 4,970 crore in FY 08, marking a 55% growth over FY07. Currently, there are only two standalone health insurance companies — Star Health and Allied Insurance and Apollo DKV — offering pure health products. The government is looking at raising the cap on foreign direct investment (FDI) in insurance from 26% to 49%. It is also considering a minimum capital requirement of Rs 50 crore for health insurance companies to make it attractive for new-entrants. Consumers are expected to get a better deal in terms of pricing when competition intensifies among these players.

Source: The Economic Times

FBI: Hospital CEO arrested in health care scheme

LOS ANGELES - A hospital CEO was arrested Wednesday in what authorities said was a scheme to recruit homeless people as phony patients and bill government programs for millions of dollars in unnecessary health services.

Federal agents raided three medical centers and the city of Los Angeles sued the hospitals, saying they used homeless people as "human pawns."
More charges are expected, a federal prosecutor said.
Hospitals in Los Angeles and Orange counties submitted phony Medicare and Medi-Cal bills for hundreds, perhaps thousands, of homeless patients — including drug addicts and the mentally ill — recruited from downtown's Skid Row, state and federal authorities allege.
While treating minor problems that did not require hospitalization, such as dehydration, exhaustion or yeast infections, the hospitals allegedly kept homeless patients in beds for as long as three days and charged the government for the stays.
Over four years, a mentally ill woman identified as "Recruit X" was admitted to all three hospitals for conditions she said she never had, such as shortness of breath and chest pains.
After her stays, she would be returned to Skid Row and use money she received for participating in the scheme to buy crack cocaine, authorities alleged. She was never treated for drug addiction.
The investigation was sparked in 2006 by a Los Angeles police investigation of reports that hospitals were dumping homeless patients on the streets.
Search warrants were served at City of Angels Medical Center, Los Angeles Metropolitan Medical Center and Tustin Hospital and Medical Center, the FBI said.
FBI agents arrested Rudra Sabaratnam, CEO of City of Angels hospital, and Estill Mitts, operator of a Skid Row health assessment center, FBI spokeswoman Laura Eimiller said. They were in federal custody and were expected to be arraigned Wednesday afternoon.
A 21-count indictment unsealed Wednesday charged both men with conspiring to receive and take kickbacks for patient referrals and to commit health care fraud. Sabaratnam also was charged with paying kickbacks and Mitts was charged with money laundering and tax evasion.
If convicted, Sabaratnam could face 50 years in federal prison, and Mitts could face 140 years, authorities said.
Bond for Mitts was set at $25,000. He was expected to be released Wednesday night to home detention, said Thom Mrozek, a spokesman for the U.S. attorney's office. Sabaratnam's bond hearing was set for Thursday.
Both men were scheduled to be arraigned Monday.
Sabaratnam's lawyer Dominic Cantalupo, and Mitts' lawyer John Vandevelde did not immediately return calls seeking comment.
U.S. Attorney Thomas O'Brien said he expects additional charges in the case.
"This is one of several major medical fraud investigations that are ongoing," he said. "There's too much money being illegally stripped from public health care programs and the potential impact to those with a legitimate need is too great to let such fraud escape federal prosecution."
Representatives of the hospitals did not immediately respond to calls seeking comment. Los Angeles Metropolitan and the Tustin hospital are owned by Pacific Health Corp. and Los Angeles-based Intercare Health Systems owns City of Angels.
The city attorney's office said it filed a lawsuit against the corporate owners of the three hospitals — along with Sabaratnam, several doctors and others — in connection with the alleged scheme.
Frank Mateljan, a spokesman for the city attorney's office, said Skid Row workers "were receiving kickbacks up to $20,000 a month from some of these hospitals and they were delivering between 30 and 50 patients a month."
Mitts ran the 7th Street Assessment Center, which screens people for health needs and takes them to hospitals if necessary.
The lawsuit said the "patients" were picked up by recruiters who sent them to the 7th Street center, where they were given phony diagnoses and forms were filled out justifying their eligibility for government medical programs.
Medi-Cal and Medicare would be billed for the ambulance and hospital stay, Mateljan said.
After their hospital stays, the homeless patients would be returned to Skid Row shelters, but "they would go back multiple times," he said.
In the lawsuit, "Recruit X" said she "received very little medical treatment, and none of the treatment that she received was necessary."
At least once, she suffered a serious drop in blood pressure after she was given a nitroglycerin patch for a nonexistent cardiopulmonary condition, the suit claimed.


Source: SHAYA TAYEFE MOHAJER, Associated Press Writ