Monday, September 1, 2014

Congress To Support Insurance Bill

Long-pending economic reform bill Insurance Laws (Amendment) Bill seeking to raise FDI (foreign direct investment) ceiling in insurance, may get parliamentary nod in the Winter session.

“We are totally in favour of FDI. It is our baby and it was the BJP which was opposed to the bill in 2008. We were given to understand that our bill is going to be passed in the House. But the NDA government has made some substantive amendments to the bill," Leader of Opposition in Rajya Sabha Mr. Ghulam Nabi Azad told reporters.

“We have recommended that the substantive issues like the FDI, which have been diluted by the FII, along with other issues should be discussed, examined dispassionately and objectively by the Select Committee. The bill can be passed in the Winter session and we will ensure its passage," he added.

The Insurance Laws (Amendment) Bill was first introduced by the UPA government in 2008, but it could not be taken up in the Rajya Sabha, the Upper House of the Indian Parliament, because of opposition from then main opposition party the BJP.

Modi-led NDA government have made as many as 97 amendments in the original bill proposed by the UPA government. Due to the stiff resistance from as many as 9 parties including the Congress, the bill could not be passed in the Budget session. They were demanding it to refer to a Select Committee of Parliament.

The government agreed to the opposition demand and eventually referred to a Select Committee.

SBI Life Buys 3.43 Lac Shares Of MCX India @ Rs 830

Private sector life insurance firm SBI Life Insurance Company Ltd, on August 27, bought 3,43,400 shares of Multi Commodity Exchange (MCX) of India @ Rs 830.

Financial Technologies India Limited sold 13,70,000 shares of MCX @ Rs 827.59 on the BSE and sold 11,79,919 shares @ Rs 834.76 on the NSE.

In the previous trading session, the share closed at Rs 856.85, up Rs 41.40, or 5.08 percent. The share touched its 52-week high Rs 895 on July 21, 2014 and 52-week low Rs 338.30 on August 28, 2013.

SBI Life Insurance Company Ltd is a joint venture between country's largest lender State Bank of India (SBI) and BNP Paribas Cardif, an insurance arm of French bank and financial services company BNP Paribas. SBI holds 74 per cent stakes in the JV and BNP Paribas Cardif, the remaining 26 percent.

Wednesday, August 27, 2014

Indian Insurers Can Invest In Onshore Rupee Bonds Of IFC, ADB

Insurance behemoth the Life Insurance Corporation (LIC) of India has tied-up with all five insurance repositories in order to comply with the Insurance Regulatory and Development Authority (IRDA) last week.

The insurance regulator had launched a two-month pilot project for Mumbai last month, making it mandatory for all life insurance firms to digitise traditional paper policies a minimum of 1,000 or 5 % of the total individual policies issued. Further, this facility may be extended across the country.

The sector regulator has recently provided insurance repository licence to five companies i.e. - Central Insurance Repository Limited, NSDL Database Management Limited, Karvy Insurance Repository Limited, CAMS Repository Services Limited and SHCIL Projects Limited.

To avail the facilities, policyholders will only need to open an e-insurance account with any of the five insurance repositories. It's free of cost for the policyholders. However, insurance companies will be required to bear the cost with the repositories.This electronic format will enable policyholders to renew policies online. Also, there will be no risk to lose the physical documents.

Tuesday, August 26, 2014

Indian Insurers Can Invest In Onshore Rupee Bonds Of IFC, ADB

Accepting the request of International Finance Corporation (IFC), Indian insurance regulator, the Insurance Regulatory and Development Authority (IRDA), on Wednesday, allowed Indian insurers to invest in onshore rupee bonds issued by IFC and Asian Development Bank (ADB).

The International Finance Corporation , World Bank's financing arm for the private sector, said that it would raise $2.50 billion (about Rs.15,000 crore) from rupee-denominated bonds to support infrastructure development in India.

IFC Executive Vice President and CEO Jin-Yong Cai said, “The IFC will use a combination of rupee-denominated bonds and swaps to raise local-currency financing of up to Rs.15,000 crore over the next five years."

“It will also create a new momentum in the development of corporate bond market and long-term bond market. It will create a yield curve which can then be followed by others", Economic Affairs Secretary Mr. Arvind Mayaram said at the time of launching the scheme.

The central government has allowed onshore rupee bonds issued by multilateral agencies like ADB and IFC to be classified as securities under the Securities Contracts (Regulation) Act.

Following this, the insurance watchdog too classified such bonds as approved investments for the Indian insurance cos.

According to the insurance regulator, the public issue onshore rupee bonds by ADB or IFC should be approved by Securities and Exchange Board of India (SEBI) and be subject to the rating criteria as per its investment regulations.

However, if SEBI exempts rating of the bonds by the credit rating agencies registered with it owing to the rating received from international rating agencies then it will be considered as approved investments, the insurance regulator said.

The valuation of these bonds will be similar to other corporate bonds and debentures, IRDA said.