The Insurance Regulatory Development Authority (IRDA) is set to allow insurance companies to invest in a few more financial instruments including derivatives.The proposed move will enhance returns for policy holders.
Currently, insurance companies are allowed to invest in around 58 financial instruments. A broadbasing of the categories of investments to include derivativesis now on the cards. “For policy holders, the move will mean higher yields with better risk management”, said S V Mony, secretary general, Life Insurance Council.
IRDA had proposed delinking the norms governing investment of assets by insurance companies from the main Insurance Act and bringing it under IRDA regulations.
The regulator plans to make a few changes which do not need an amendment to the main Act. One such change includes adding a few more instruments to the investment category known as “other than approved securities, said C S Rao, chairman IRDA
Source: The Economic Times
Monday, July 23, 2007
Sunday, July 22, 2007
QBE AND RAJAN RAHEJA IN JV FOR GENERAL INS
21/July/2007
The QBE Insurance Group, Australian major -- has entered India's growing general insurance market by signing a joint venture agreement with diversified conglomerate Rajan Raheja Group.
According to sources, QBE will invest around seven million dollars initially for a 26 per cent stake in the JV, to operate in the Indian general insurance business.
A managing director will also be nominated by QBE and provide technical expertise. It has the option to increase its equity to 50 per cent ,if the Indian legislation permits so.
Frank O’Halloran, the QBE CEO has said that the group is excited about the opportunity to work in India 's rapidly growing general insurance market. He also expressed his delight on his partnership with the Rajan Raheja Group, which has extensive interests in India and a track record of successful joint ventures with foreign partners.
Subject to IRDA approval, the joint venture company expects to begin trading in early 2008
The QBE Insurance Group, Australian major -- has entered India's growing general insurance market by signing a joint venture agreement with diversified conglomerate Rajan Raheja Group.
According to sources, QBE will invest around seven million dollars initially for a 26 per cent stake in the JV, to operate in the Indian general insurance business.
A managing director will also be nominated by QBE and provide technical expertise. It has the option to increase its equity to 50 per cent ,if the Indian legislation permits so.
Frank O’Halloran, the QBE CEO has said that the group is excited about the opportunity to work in India 's rapidly growing general insurance market. He also expressed his delight on his partnership with the Rajan Raheja Group, which has extensive interests in India and a track record of successful joint ventures with foreign partners.
Subject to IRDA approval, the joint venture company expects to begin trading in early 2008
Saturday, July 21, 2007
3 entities proposed for pension fund managers
New Delhi, June 20 The committee formed by the Pension Fund Regulatory and Development Authority (PFRDA) has recommended the names of three public sector financial institutions as managers of pension funds under the New Pension Scheme (NPS).
Based on the overall evaluation, including technical and commercial parameters, the committee has found State Bank of India, UTI Asset Management Company Private Ltd and Life Insurance Corporation of India as the three best value bidders.
The three entities will now have to set up separate companies and the whole process of managing pension funds could start in the next four to six months.
IDBI Capital Market Services Ltd was the other company that was short-listed and had given the request for proposal (RFP) after seven companies had originally evinced interest when the PFRDA had called for applications for the role of pension fund managers.
“The report of the committee is under consideration by the PFRDA. The process of contract negotiations will begin shortly and we are hoping that the negotiations would be finalised by August 31,” Ms Meena Chaturvedi, Executive Director, PFRDA, told Business Line.
She, however, refused to give specific details on the recommendations of the committee.
“Since the report was submitted only on Thursday, it is too early to comment on the contents as we are still going through the document. But the committee was entrusted with the responsibility of evaluation of the proposals received from the eligible entities and to short-list the three best value bidders in terms of requirements (technical & commercial) of RFP and we are sure they have selected the best,” she added. Pension scheme
As per estimates, about five-lakh Central and state government employees have joined the scheme since it came into being on January 1, 2004, leading to accumulation of around Rs 1,700-crore pension fund corpus.
Under the NPS, employees have to contribute 10 per cent of their basic salary and dearness allowance, with a matching contribution from their employer.
This contributory system is in contrast to the earlier system, in which employees used to get defined returns.
The sponsors will have to offer alternative products to employees including risk-free options under which all funds would be invested in government securities, and share-market linked products with variable returns as well.
Meanwhile, the contract between PFRDA and National Securities Depository Limited (NSDL) is under finalisation and the work relating to CRA (central record keeping agency) activities will commence as soon as NSDL obtains the approval of SEBI to undertake this work.
source :Business Line
Based on the overall evaluation, including technical and commercial parameters, the committee has found State Bank of India, UTI Asset Management Company Private Ltd and Life Insurance Corporation of India as the three best value bidders.
The three entities will now have to set up separate companies and the whole process of managing pension funds could start in the next four to six months.
IDBI Capital Market Services Ltd was the other company that was short-listed and had given the request for proposal (RFP) after seven companies had originally evinced interest when the PFRDA had called for applications for the role of pension fund managers.
“The report of the committee is under consideration by the PFRDA. The process of contract negotiations will begin shortly and we are hoping that the negotiations would be finalised by August 31,” Ms Meena Chaturvedi, Executive Director, PFRDA, told Business Line.
She, however, refused to give specific details on the recommendations of the committee.
“Since the report was submitted only on Thursday, it is too early to comment on the contents as we are still going through the document. But the committee was entrusted with the responsibility of evaluation of the proposals received from the eligible entities and to short-list the three best value bidders in terms of requirements (technical & commercial) of RFP and we are sure they have selected the best,” she added. Pension scheme
As per estimates, about five-lakh Central and state government employees have joined the scheme since it came into being on January 1, 2004, leading to accumulation of around Rs 1,700-crore pension fund corpus.
Under the NPS, employees have to contribute 10 per cent of their basic salary and dearness allowance, with a matching contribution from their employer.
This contributory system is in contrast to the earlier system, in which employees used to get defined returns.
The sponsors will have to offer alternative products to employees including risk-free options under which all funds would be invested in government securities, and share-market linked products with variable returns as well.
Meanwhile, the contract between PFRDA and National Securities Depository Limited (NSDL) is under finalisation and the work relating to CRA (central record keeping agency) activities will commence as soon as NSDL obtains the approval of SEBI to undertake this work.
source :Business Line
GIC, PSU insurers axed from UTI Bank offer
The General Insurance Corporation (GIC), the country's only reinsurer, and the four government-owned general insurance companies, New India Assurance, Oriental Insurance, United India Insurance and National Insurance, will not be able to participate in the upcoming preferential offer being made by UTI Bank to its promoter shareholders.
A UTI Bank official said these companies had sold some shares of the bank after the extraordinary general meeting on June 25, which passed a resolution to make a preferential offer to its promoter shareholders.
Guidelines framed by the Securities & Exchange Board of India say that any shareholder that has sold shares six months prior to the date of a preferential offer cannot participate in the offer.
“Accordingly, they have been declared ineligible to subscribe to the preferential offer. However, they could approach Sebi to get an exemption,” said a senior UTI Bank official.
Confirming the development, the investment head of a public sector insurance company said, “We are not eligible for the preferential offer.”
Asked why his company had sold the UTI Bank shares, the official said, “The market was moving up. It was part of our regular transactions. We have to book capital gains.”
The GIC and the four insurance companies together hold 5 per cent in UTI Bank.
The bank was planning to mobilise over Rs 2,000 crore through the preferential allotment to its promoters — the Specified Undertaking of Unit Trust of India, the Life Insurance Corporation, the GIC and the four general insurers.
If GIC and the four insurance companies do not participate in the preferential offer, their stake in UTI Bank could come down from the current 5 per cent.
Source:Business Standard
Friday, July 20, 2007
Irda lists norms for closure of liaison insurance offices
Chennai, Jul 19 The Insurance Regulatory and Development Authority (Irda) has announced a set of norms for closure of liaison offices established in India by insurance companies registered outside India. Irda’s framework for approval of opening a liaison office of foreign insurance companies registered outside India is already in place.
As per the norms, the requests for closure of liaison office shall be submitted to IRDA in form Irda FIC - 2 attached as annexure ‘1’. The application for closure of liaison offices shall be submitted along with the documents including certified copy of Irda’s permission for establishing the branch/liaison office in India, a chartered accountant’s certificate indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant indicating the manner of disposal of assets, confirming that all liabilities in India including arrears of gratuity and other benefits to employees etc of the office have been either fully met or adequately provided for; confirming that no proceeds accruing from sources outside India has remained unrepatriated to India.
As per the guidelines, the insurance companies should also enclose the no-objection/tax clearance certificate from Income Tax authority for the remittance or an undertaking from the applicant and a certificate from the chartered accountant regarding undertaking to be obtained from a person making remittance of foreign exchange as advised by RBI from time to time and confirmation from the parent entity that no legal proceedings in any court in India are pending against the liaison office and there is no legal impediment to the closure/remittance.
Source: Financial Express
As per the norms, the requests for closure of liaison office shall be submitted to IRDA in form Irda FIC - 2 attached as annexure ‘1’. The application for closure of liaison offices shall be submitted along with the documents including certified copy of Irda’s permission for establishing the branch/liaison office in India, a chartered accountant’s certificate indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant indicating the manner of disposal of assets, confirming that all liabilities in India including arrears of gratuity and other benefits to employees etc of the office have been either fully met or adequately provided for; confirming that no proceeds accruing from sources outside India has remained unrepatriated to India.
As per the guidelines, the insurance companies should also enclose the no-objection/tax clearance certificate from Income Tax authority for the remittance or an undertaking from the applicant and a certificate from the chartered accountant regarding undertaking to be obtained from a person making remittance of foreign exchange as advised by RBI from time to time and confirmation from the parent entity that no legal proceedings in any court in India are pending against the liaison office and there is no legal impediment to the closure/remittance.
Source: Financial Express
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