MAX NEW YORK LIFE LAUNCHES INSURANCE-CUM-SAVINGS PRODUCT

New Delhi: Max New York Life Insurance on Thursday launched “Max Vijay”, an insurance-cum-savings product aimed at the underserved segment of society. Announcing the launch, the company’s Chairman, Mr Analjit Singh, said “Max Vijay empowers millions of Indians, who may not be a part of the economic growth scenario that the country is witnessing, to participate in this revolution and realise their dreams. The business model leverages innovation at every step — be it product design, technology, distribution or service delivery — to ensure a comprehensive offering for the common man.”

Max Vijay has been designed keeping in mind the lifestyle, income patterns and needs of the rural and semi-urban population. It empowers millions of Indians to benefit from the economic boom in financial services that was hitherto denied to them, company officials said.

The minimum premium payable under the product will be Rs 1,000 and the policy will not lapse as long as there is sufficient value in the account. The company has tied-up with IBM to provide end-to-end technology backbone for fulfilment. Apart from this, they will facilitate the handheld terminal, which enables data transfer to the back-end through GPRS and hence facilitates on-the-spot policy receipt

Meanwhile, Mr Singh told newspersons that it would be business as usual for Max New York Life even though there are indications of the Government pushing for legislative changes to increase the sectoral cap on insurance from 26 per cent to 49 per cent. The company was not looking at a listing for the moment, he said, and added that the joint venture partners have committed to raise the paid-up capital from Rs 1,300 crore to about Rs 3,600 crore in the next two years.

Source: The Hindu Business Line

SBI LIFE MAKES LOSS IN Q1 ON RS 150-CR PROVISIONS

Mumbai: SBI Life Insurance Company Ltd has made provisions of Rs 150 crore for mark to market losses on its investment portfolio. The provisions have meant that the company has made a net loss in the first quarter.

Mr U.S. Roy, Managing Director and CEO, said, “An IRDA directive in March had asked companies to make provisions on diminution in assets but there has been no formula prescribed. We are following the method used by banks and are taking a conservative approach by making such prudential provisions,” he said.

The company, which has been profitable in the past two years has not disclosed the net loss made in the first quarter. SBI Life’s assets under management stand at Rs 11,727 crore. Mr Roy said that around Rs 4,000 crore was invested in equity and the depreciation was seen mainly in this portfolio.

SBI Life has, however, shown a sharp growth in new business premium. The new business annualised premium equivalent (APE), that takes single premium income at 10 per cent, has grown by 241 per cent to Rs 972 crore.

The contribution of ULIPs to the company’s portfolio has dropped to 54 per cent, from 70 per cent in March. Mr Roy said the company has been strategically pushing traditional products.

Source: The Hindu Business Line

INSURANCE FIRM ASKED TO PAY COMPENSATION

Hyderabad: The A.P. State Consumer Disputes Redressal Commission has rejected the repudiation of a policy-holder’s claim by a health insurance company and ordered it to pay compensation.

The commission disposed of the appeal by Royal Sundaram Alliance Insurance Company Ltd. and upheld the order by the Krishna District Consumer Forum towards reimbursement of the medical expenses incurred by B. Ramanadham, a policy holder. Mr. Ramanadham, a resident of Vijayawada, had taken Health Shield Insurance Policy and Hospital Cash Insurance Policy from Royal Sundaram Alliance.

Under these policies, he was entitled to full reimbursement of treatment expenses up to Rs.1 lakh apart from Rs.1,000 a day as inpatient treatment charges. Mr. Ramanadham visited the NRI General Hospital at Chinakakani in Guntur district in June 2007 with the complaint of a backache. He was admitted to inpatient ward of the hospital in August 2007 and discharged after 10 days.

Mr. Ramanadham filed a claim with the company for Rs. 10,525 towards daily treatment charges and Rs.14,725 for treatment expenses. The company agreed to pay only daily treatment charges and rejected the claim for treatment expenses saying that his backache was a pre-existing ailment. The policy holder challenged the company’s decision in the Krishna District Consumer Forum.

The District Forum gave a ruling in favour of Mr. Ramanadham in April by considering backache as a natural ache and not pre-existing aliment. Royal Sundaram opposed the Forum’s ruling and appealed in the State Forum for its reversal. However, the State Forum upheld the directive of the lower forum on July 7. It ordered the company to pay Rs.10,525 and Rs.14,725 respectively for inpatient and treatment charges with 9 per cent annual interest and costs of Rs.1,000 to the policy-holder.

Source: The Hindu

CHAMBER FOR NATIONAL CLIMATE CHANGE INSURANCE FUND

Kolkata: The Indian Chamber of Commerce is in favour of a national climate change insurance fund, with a cap on paid losses. Releasing a report entitled ‘Business Risks and Opportunities of Climate Change’ to newspersons here recently, Mr Vishambharan Saran, Senior Vice-President, ICC, said, “The insurance companies, for instance, could be asked to give discount on premiums for covering companies, which adopt eco-friendly projects.”

While there were several insurance products available in the market providing coverage to physical damage caused by climate change, hardly any product was available to cover business risks of climate change.

Source: The Hindu Business Line

GOVT ALL SET TO USHER IN FINANCIAL REFORMSThe

New Delhi: With the Left off its back, the government is all set to initiate major reforms, especially in the financial sector, are expected in the coming months. Labour reforms too are long awaited, but the government knows that this is much more politically fraught, and is unlikely to do anything on which there is no consensus among UPA allies. Official sources said the Prime Minister would soon be taking up the issue of reforms with Samajwadi Party. "Our aim will be to build a consensus on these reforms with Samajwadi leaders and initiate steps to usher them in before the Lok Sabha polls next year," said a source. Singh believes that valuable time has been lost because of the Left's "cussedness" on reforms. Singh also believes that a dose of meaningful reforms would also be an antidote to the general sluggish sentiments and may, in fact, help in tackling inflation and other aam admi issues.

Financial sector reforms, covering insurance, banking and pensions, could spur investments and add as much as 1.5% of the country's growth. That, in turn, would give the government the opportunity to address issues of welfare and distress. The main reform in insurance is to raise the foreign direct investment cap from 26% to 49%. In fact, Finance Minister P Chidambaram had proposed this FDI hike, but in light of the Left's total opposition to his proposal, he had to backtrack. But once the cap is relaxed, a lot more foreign money is expected to flow in and help to expand the insurance sector. The Indian pensions sector is totally unreformed. The government wishes to create a statutory regulator for the sector and had promulgated an ordinance for appointing a Pension Funds Regulations and Development Authority. But once again, agreement with the Left proved elusive, and the ordinance lapsed. The appointment of a regulator will set the scene for breaking the monopoly of the Employees Provident Fund Organisation (EPFO), with which both the government and the private sector have to park their pension money currently. The regulator can permit new pension funds and create the framework for them to operate in an open and transparent environment. In turn, pension funds can vie for government or private sector pension money, offer advice on its best utilization and also give companies and individuals options on how best they think their money can be deployed that is, how much in fully secured instruments and how much in the market where returns could be higher but so would be the risk. Finally, the banking sector reforms that have been hanging fire entail allowing the government's stake in public sector banks to come down below 50% and raising the current 1% cap on voting rights that applies to all other shareholders in state-owned banks. Reformers believe that this will bring in megabucks and enhance banks' capital adequacy ratio.

Source: Economic Times