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| New IRDA Guidelines for Selling Insurance Products
For selling insurance products through telecallers, emails and other distance marketing modes, the Insurance Regulatory and Development Authority (IRDA) has come up with fresh draft guidelines on Friday.
According to the guidelines on which IRDA has invited comments from stakeholders till June 20, telecallers will not cause any trouble, nuisance or harm while requesting the clients and obey all the requirements of confidentiality, privacy and nondisclosure. The guidelines are aimed at keeping tabs on the erratic and false claims to lure customers and want the insurers to record the calls and let the customers understand the features.
The proposed standards have also specified that insurers would monitor all the ULIPs sold through distancemarketing mode. Currently, market watchdog Securities and Exchange Board of India (SEBI) and IRDA are locked in a legal battle over the control of ULIPs. The draft guidelines further said that telemarketers should abide by the TRAI guidelines on unsolicited commercial communications.
While announcing the draft proposals, the regulator asked policyholders, consumer organizations, distributors and other stakeholders to come out with their opinions. The draft would also cover interactions through interactive television (DTH), post, print media and all other means other than in person
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| LIC to share database with Unique Identification Authority
LIC have decided to share its database of more than 21 crores of its customers with Unique Identification Authority of India. LIC has tied up with (UIDAI) in this matter.
The corporation will share the data like customers name, date of birth, address, gender and other biometric information with UIDAI. UIDAI then with this information will verify and issue unique identification number.
Mr.Nandan Nilekani the chairman of UIADI said in a press conference that LIC will act as the register for the 12 digit identity number.
The LIC already has a database consisting of every detail of all their customers. This will be shared with UIDAI for allocation of the UID. The tie up with UIDAI will also help LIC to collect the renewals of premium it will help to deal with clients having more than one policy, and to administer various schemes of social security category. These points were said by Mr. Vijayan chairman LIC.
Mr. Nilekani stated that the first of the UID numbers will be allocated from August 2010 as declared in the budget.
UIDAI is interacting with other financial institutions to act as registrars so that the faster allocation of UID can be ensured. Mr. Nilekani said that they are taking with RBI as well as National Payments Corporation of India the Indian Banks association.
UIDAI intends to register over 600millions people in the coming five years.
This project involves IT infra structures like backend centers data centers and that demands good investment though Mr. Nilekani refused to give details on their investment for IT infrastructures. He said that they would like to create a database of about 1,200 million people which will be the largest and it will be ten times more than the existing database of just 120 millions.
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| Singapore denies ticket to unrated LIC
LIC, India’s largest financial institute has been denied by Singapore, to set up a subsidiary there unless and until it produces a credit rating by any international agency.
About a year back LIC had asked Singapore so that it can set up a company there to sell life insurance policies and it seemed the talk was progressing well with the local authorities.
There is one representative office of LIC in Singapore run by the state owned insurer .which was pretty hopeful about getting a license ,but the Singapore Authorities insisted that LIC needs to produce rating from any international agency to sell insurance policies there and they made it clear on the last round of negotiation.
LIC had raised the point that it is a unique entity and functions with a meager capital of just5 crore in comparisons of other insurance companies all over the world, and that’s why the conventional rating measures would not apply to them.
LIC gets its financial strength from the fact that every single policy issued by them is backed by the government otherwise they are bound by law to plough back profits. Their entire profit is shared by the policy holders and the government.
LIC had hired management consultants in the past and they have said that the guarantee from the state government is the semi or quasi capital, and the government should convert that into real capital by giving LIC a corporate entity.
LIC might not have capital but it had successfully funded international operations by allocating budgets when and where required.
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| Max India Q4 loss at Rs 2.3 crore
Max India has announced its fourth quarter financial results for the fiscal year 200910 and it has informed that in this quarter it has incurred a loss. The company has posted a net loss of Rs 2.3 crore for the quarter that ended in 31st March, 2010. The net loss of the firm was reported to be Rs 6.7 crore for the fourth quarter last year. However, it has managed to minimize the net loss figure in this quarter.
The total income of the firm has gone up. So far as the total income of the firm is concerned, it has grown up to Rs 99 crore during the JanuaryMarch period of fiscal year 200910. The income stood at Rs 91 crore for the same quarter last year. This has been informed by the firm in a filing at the Bombay Stock Exchange. The annual consolidated loss of the company was reported to be Rs 71 crore for the year under review from a consolidated net loss of Rs 218 crore last year.
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| AIG rejects bid for Asian life insurance business
A $30.3 billion bid for its Asian life insurance business was rejected by American International Group after weeks of negotiations with British insurer Prudential.
The New York Times reported on Tuesday that the U. S. insurance giant, which has sold several major assets to help pay back $182 billion in federal government loans, refused to budge on its asking price of $35.5 billion.
It has been reported that the rejection thwarts Prudentials goal of growth and derails AIGs federal bailout repayment plans, at least temporarily. The Federal Reserve was set to receive $16 billion from AIG after the sale to Prudential was completed.
It "will not consider revisions" to terms for its Asian life insurance business, American International Assurance, which is based in Hong Kong, AIG announced.
Prudential Chief Executive Officer Tidjan Thiam could lose his job if the deal collapses completely, Howard Wheeldon, a market analyst in London, at BGC, said.
Wheeldon told the Times, "Mr. Thiam could indeed fall on his sword." (With Inputs from Agencies)
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| Watchdog panel criticizes the government over AIG bailout
The watchdog panel has said that it is still not clear whether the US taxpayers will fully recoup all the 182 billion dollars they have invested to American International Group (AIG) o not. It has also added that the government should have used all other options before calling for the bailout.
According to the panel members the government could have reacted sooner and more aggressively to go for the rescue of AIG in 2008 by the help of any privately fund.
According to market experts, the bail out could have a very venomous effect this time and may cause an economic crisis. The market believes that the government will give taxpayers money to stop the big financial institution from collapsing.
The treasure department and the AIG executives have given optimistic assessment of the company but according to the Congressional Budget Offices estimation the taxpayers of US will loose 36 billion dollar which is a huge amount. So now everything lies on AIG whether AIGs other remaining units would be able to generate sufficient new business and shareholder value to repay the appropriate amount to the taxpayer of US
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| Bajaj Allianz joins hands with Dena Bank
As the last financial year has been fruitful for almost all the private and the public insurance companies but Bajaj Allianz has been the frontrunner in the race. In fact, the success gained in the past year hasnt really bought complacency in its approach rather the insurer is aiming to strike gold this fiscal.
And the recent deal under which the Private sector insurer Bajaj Allianz Life Insurance today signed an agreement with public sector lender Dena Bank for the distribution of an insurance product can be considered as one of the first steps in that direction.
According to the joint statement released by both the giants, Dena Bank will distribute Bajaj Allianz Life Insurances group life insurance product Sarva Shakti Suraksha, under the deal in the agreement.
Dena Bank General Manager M K Sharma said that the deal will empower the banking company to offer a lowcost financial product to the Indian consumer and will be useful for one who cant afford insurance and hence it is believed that it will suit the needs of a larger base of the Indian population
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| Suncorp plans to save $A225 million by 2013
Suncorp Metway Ltd., the second largest car and home insurer in Australia, is planning to improve its underlying margin over the coming two years by at least 3% annually.
The Insurer said that it expects a saving of around $A235 million by the June 2013. Suncorp also revealed its plans to merge its myriad personal insurance brands into a single megainsurance business.
Suncorp said that it plans to improve the underlying margins at its general insurance business by at least 3% over two years. The company said that it will achieve this goal by simplifying pricing and claims.
"Our move to a functional model and a single view of pricing and claims will ensure the general insurance business leverages scale advantages across all of its brands and unlocks the potential in functional capability that has not been realized to date," said Patrick Snowball, chief executive of Suncorp.
Suncorp named this cost cutting project Building Blocks Program. The company said that this program would deliver a saving of $A235 million in annual benefits from June 2013.
Building Blocks Program will cost around $A120 million, according to the company. Suncorp also said that this cost of the project will be absorbed by cuts to discretionary spending and redirection of capital expenditure.
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| Max New York Life partners Axis Bank for insurance products
Insurance giant, Max New York Life Insurance has entered into a partnership agreement with Axis Bank for the distribution of its insurance product through the banks network of branches across the country.
Under the agreement, the insurer will provide customized life insurance solutions to bank customers. The partnership will allow Max New York Life Insurance to expand its distribution channels and increase its presence across the country. The partners expect to attract about 2 million customers.
Max New York Life Insurance Chief Executive Officer and Managing Director Rajesh Sud said, the partnership model will bring changes in the industry and take the tie ups between banks and insurance companies to a new level.
Max India, which owns a 74 per cent stake in the insurance company will offload 4 per cent to Axis Bank in order to further strengthen the partnership. The holding of Max India will now stand at 70 per cent in the insurance company.
Shikha Sharma, MD CEO, Axis Bank said, "The idea was to have some common interest in growing the business together. So our stake in Max New York Life will reflect that."
Mr. Sud further said that his company did not pay any premium for the tie up and it will bring benefits to both the partners.
Meanwhile, the insurer has said that the company expects a 1520 per cent increase in premium collection in the financial year 201011. During the last year, the company saw 0.22 per cent increase at Rs 1,848 crore in new business sales.
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| IRDA will launch vehicle insurance tracking system
The Insurance Regulatory and Development Authority (IRDA) have announced in Hyderabad that, it is going to come up with a webbased system to track vehicle insurance status soon. It may be implemented in the coming month itself.
Data of the vehicles will be shared with the transport and police authorities in different States of India. This system can immediately provide the information of the insurance status of the vehicle. He has also informed that this system will undoubtedly have the advantage over the contemporary manual record maintenance system. The Transport Authority (RTA) in every State can also access this insurance status of different vehicles on the road.
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| Axis Bank and Max New York Life enter into a strategic tieup
One of the leading players in the Indian insurance business, Max New York Life Insurance and the third largest bank in industry, Axis Bank today entered into a strategic tieup for 10 years under which Max New York Life will provide customized life insurance solutions to customers via the banks vast network.
The deal will be in effect from i. e. May 3, 2010 and is expecting to serve 20 lakh customers in 5 years through the over 1000 branches of Axis Bank spread across over 650 cities in the Indian market
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| Allianz raises dividend, AEGON decides against it after returning to profit
Europes biggest insurance company Allianz will raise its dividend payout by 17 per cent after returning to profit. Dividend for 2009 was raised to €4.10 a share, from €3.50 a share for 2008.
Net income from continuing operations, excluding the sale of Dresdner Bank last year, was 1.09 billion euros ($1.47 billion), compared with a 145 millioneuro loss posted a year earlier.
The Operating profit of Munichbased insurer more than doubled to €2.05 billion in the SeptemberDecember quarter, taking the fullyear figure to €7.18 billion revenue for the same period rose 10.7 per cent to €25.5 billion. The decline property and casualty insurance was offset by a growth in asset management and a return to profit in life and health insurance segment.
"With regard to key figures for the fiscal year 2010, we believe that our operating profit will be at the same level as 2009," CEO Michael Diekmann said.
Dutch insurer AEGON didnt declare dividend, but did beat market expectations with a profit of €393 million in the fourth quarter, as compared to a loss of €1.18 billion a year ago.
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| AIG to sell Asian insurance biz to Prudential Plc
Prudential has decided to buy nationalized US insurer American International Groups Asian business for about $35.5 billion. This would be AIGs biggest largest asset sale since the US government offered approximately $182 billion in taxpayers money to keep the insurer afloat and avoid any collateral damage.
Prudential Plc UKs secondlargest insurer has offered to pay about $35.5 billion of which $25 billion would in cash, which it would raise by issuing equity, and the remainder in stock, said the people familiar with the deal.
The move by AIG strategically makes sense and could generate proceeds, which would help reduce the oversight by Federal Reserve over AIG the US Treasury currently owns 80 per cent of the insurer. AIG also plans to sell Alico, which primarily operates in Japan and Europe.
The insurer posted widethanexpected net loss of $8.87 billion for the fourth quarter from $61.7 billion or $458.99 a year ago. The $65.51 a share loss included $6.7 billion for repaying Federal Reserve credit line and $1.8 billion to add to propertycasualty reserves.
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| Mediclaim Cos cannot fool clients by playing with words: Court
“The death of a portion of heart muscle as a result of inadequate blood supply as evidenced by an episode of typical chest pain, new ectrocardiaographic changes and by elevation of the cardiac enzymes. Diagnosis must be confirmed by a consultant physician.”
This is not the description of a heart disease in a medical journal but definition of the now common heart attack in the policy of a prominent life insurance company.
When St Stephen’s Hospital handed A. K. Jain a bill of Rs 1.91 lakh after heart surgery, he remained cool.
He expected full reimbursement from his mediclaim policy with ICICI Prudential Life Insurance.
He had suffered a heart attack on November 11, 2007. A stent was placed in the veins to regularize blood flow.
To his shock, the company declined to pay, saying “his disease did not correspond to the symptoms laid down in the insurance cover”. It was pointed out “no muscle of heart became dead” and “no elevation of enzymes was noted ”, and “no changes were found in the ECG”.
Not ready to take the injustice lying down, Jain moved the consumer court.
Twoandhalf years later, on Tuesday, Jain got justice with the Delhi State Consumer Commission asking ICICI to reimburse full amount and a compensation of Rs 8,000. The panel termed ICICI’s definition of ‘heart attack’ as laying down of rare symptoms deliberately to deny reimbursement.
In a message to all companies, the panel headed by Justice Barkat Ali Zaidi said it is not open to a insurance company to insist on symptoms and details which often do not appear to escape payment of compensation. “It amounts to defrauding and cheating the customer”.
Symptoms of all heart ailment cannot always be the same and cannot match 100 percent”, said the panel upholding a district forum order.
Countering ICICI’s argument that Jain had signed the document with their conditions, the panel said such minute details are generally glossed over and citing them to deny payment was “fraud and deception”. “The spirit of the agreement (between the company and policy holder) must be assumed to be such as to provide relief in case of any heart disease.
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| Aviva reports profit rise, calls Prudential’s Asia plans “audacious”
Aviva Chief Andrew Moss has called Prudentials Asia takeover plans as "audacious" and said that Aviva would be growing with the help of its own deals in Europe, especially Britain.
After announcing a surprising rise in its operating profits, Moss said that the offers made by its rival were "audacious." He was confident that the company would be able to make progress and was not under any kind of pressure.
Prudential has, on Monday, made an offer to buy AIGs Asia business for $35.5 billion.
He further added that Britains second largest insurer would now be focusing more on its business in Europe. He said that the European market is going to increase in absolute terms and that there are threats of increasing consumer regulations in Asia.
Moss expects the European market to be worth close to $1.7 trillion in the next five years period, which will be higher than North America and Asia.
This is possible because of the rising old age population in Europe. Most of these are from the "baby boomers" generation.
Meanwhile, the profits of Aviva have surged due to its cost cutting measures, which have been very stringent.
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