Tata AIG General Insurance appoints Garg as MD

MUMBAI: Tata AIG General Insurance Wednesday announced the appointment of Gaurav Garg as the managing director, effective July 1. He will succeed Michael Carlin.
Currently, Garg is the vice president - field operations, AIG, New York.
Garg was a part of the start up team of Tata AIG General Insurance Company in 2000.

Source: Times News Network

Non-life insurers getting ready for new regime

Shifting to half-yearly solvency reporting in line with global practices

Bangalore June 19 In a bid to improve solvency monitoring, non-life insurers in the country are quietly being prepared to migrate to a half-yearly reporting regime.
The Insurance Regulatory and Development Authority (IRDA) Chairman, Mr C.S. Rao, told Business Line, "After shifting to a deregulated tariff regime, it is necessary that solvency should also be monitored more frequently. We prefer a half-yearly audited reporting."
Currently, only life insurance companies have migrated to a quarterly reporting of solvency, beginning this financial year.
Non-life insurer's solvency reporting is still done on an annual basis though deregulation of tariff regime was introduced from the beginning of this financial year. The insurance regulator's prescribed solvency margin is 150 per cent.

Solvency margin

Solvency margin is the excess of the value of assets and capital that non-life insurers have to maintain over the insured liabilities. Mr Rao said IRDA has not yet decided on the timing of the introduction. However, the regulator is in discussion with the non-life insurers for accelerated introduction, he added.

IAIS guidelines
The reporting would be on the basis of the total balance sheet, instead of segment-wise reporting. This is an approach that has been suggested by the International Association of Insurance Supervisors (IAIS) in its final guidelines for migration to the Solvency II regime. The IAIS final guidelines released in February this year addresses material risks that insurers face — underwriting risk, market risk, credit risk and operational risk.
Mr Rao said IRDA shift to half-yearly monitoring was in line with global practices followed by insurance supervisors and partly in line with the IAIS guidelines.
However, this kind of monitoring would bring more volatility in capitalisation requirements of insurance companies. This is particularly in an environment where the probable maximum loss ratios could change in the event of catastrophic events, including natural calamities with consequent changes in underwriting risks.
Besides, sources said that what could also alter the capitalisation requirements would be the change in the value of the assets (market risks) particularly investments, as insurers begin shifting to a value at risk basis method of valuations. Almost all the insurers have shifted to a marked to market basis valuing of investments, though this is currently done only on an annual basis.
Already non-life insurers have been hit by depreciation in the value of government securities, and other debt securities that comprised the bulk of their investments.
A shift to half-yearly or quarterly basis, the sources said, would in turn, imply that either the insurers bring in additional capital to meet the solvency requirements or resize their insured liabilities by ceding some liabilities to reinsurers, the sources said.
Private sector insurers, to ensure compliance to the current tight solvency guidelines, are doing ceding liabilities on a large scale both to the national reinsurer GIC and to global reinsurers through the treaty and non-treaty routes - facultative or excess of loss reinsurance (spot covers).

Source: The Hindu Business Line

New CEO of AEGON Religare

New Delhi, June 19
AEGON Religare Life Insurance Company Ltd, the joint venture of AEGON NV and Religare, on Tuesday announced that it has appointed Mr Rajiv Jamkhedkar as CEO. Currently, Mr Jamkhedkar is Head of Personal Lending at CitiBusiness, which focuses on the SME segment at Citibank. AEGON and Religare, a Ranbaxy Group company, have partnered to establish a life insurance company in which Religare holds a 44 per cent stake while Aegon has 26 per cent stake; Bennett & Coleman holds the rest.

Source: The Hindu Business Line

New insurance product

The product, Gold Plus Plan, also offers the option of reducing your premium amount from the first year onwards

Realizing that Indians prefer short pays, Birla Sun Life Insurance has launched a life insurance product where you need to pay a premium only for three years. Life insurance policies generally have a lock-in period of 7-10 years.
The product, Gold Plus Plan, also offers the option of reducing your premium amount from the first year onwards. It is a unit-linked insurance plan under which your premium money is invested in the stock markets.

Other features

Premium:Even if you reduce the premium amount from the first year, there will be no lowering of the assured sum. You can start your policy with a minimum annual pay of Rs10,000.
Fund offer:You can choose from seven kinds of funds that decide the proportion of exposure in equity and debt instruments. You can also change the allocation into the various funds any time during the term of the policy. The seven funds are— Assure, Protector, Builder, Enhancer, Creator, Magnifier and Maximiser.
Eligibility:Individuals between 18 and 70 years of age are eligible for the policy.
Tax benefits: You will get tax benefits under Section 80 C and Section 10 (10D) of the Income-Tax Act.
Top-up premium:You can increase your fund whenever you have additional savings prior to the maturity of the policy. The minimum top-up premium is Rs5,000.

Policy charges

Premium allocation charge:This is the percentage of the premium appropriated towards charges from the premium received. The balance, known as allocation rate, constitutes that part of the premium which is utilized to purchase units for the policy. For the first year, allocation charges are 8% for the policyholder and for the second and third year, 4%.
Fund management charge:This is the charge levied as a percentage of the fund value. Under this head, the company will cut 1.5% of the fund value every year.
Policy administration charge: The policy has a high administration charge. For the first three years, it is 18.4%. If you want to continue the policy for the fourth year, the rate is 14.4%.
Mortality charge:This is the cost of insurance cover. As you grow old, the mortality charge increases. It is age-specific and will be deducted every month. For instance, for a 25-year-old person, the mortality charge is 1% while for 65-year-old person, it is as high as 21%.
Surrender charge:If you plan to surrender your policy before three years, the surrender charges are 15%, 12.5% and 10% for first, second and third years, respectively. From the fourth year, the surrender charge will be zero. But, in case of surrender in the first three policy years, the benefits will be paid out only after the third policy year.

Source: www.livemint.com

Tata AIG`s rural policy launch soon

Tata AIG Life Insurance Company, a private life insurance player, is planning to add rural health insurance product to its rural insurance portfolio.

Talking to Business Standard, Joydeep Roy, chief distribution officer, Tata AIG Life Insurance, said, “The company is coming up with rural health insurance product in the next six months”.

However, the company is yet to finalise the features of the product and whether the health insurance product would be combined with life insurance.

Before the product is launched, the company has to comply with the micro-insurance guidelines, informs Roy.

“We are yet to file for the permission for rural health product with Insurance Regulatory and Development Authority (IRDA)”, adds Roy.

Apart from launching rural health insurance product, the company is also working on creating a new distribution channel to market its insurance products in the rural areas of the country.

Speaking on the company’s efforts to find out a new distribution model for its rural insurance products for the rural markets, he said, “We are working to find out a innovative ways of distribution of our life insurance product in rural market”.

He further said, “Just like agricultural produce moving without restricted to any one market, we would like to have a situation where services can also flow in a similar way “.

The company is exploring new distribution system where the life insurance products will be distributed in a similar way as any other products and goods are distributed in the market.

Source: Business Standard