Monday, December 30, 2013

PSU banks to become insurance brokers

With a view to intensify insurance penetration and stop mis-selling of insurance products, the union finance ministry has urged all state-run banks to act as insurance brokers starting from January 15 next year by floating a subsidiary to increase their distribution networks. In a letter, the ministry has asked them to act as insurance broker so that the entire network of banks will be utilised to take insurance reach also to the faraway villages.

Following the FinMin diktat, public sector banks (PSBs) will soon be offering customers a choice of insurance products from different companies as against products from one company. Currently, banks are acting as corporate agents; and are allowed to sell products of one life, one non-life and one health insurance company.

One of the gainers of this move would be the Life Insurance Corporation (LIC) of India, the country's largest insurer, since it has the highest brand recall and most banks are likely to include LIC policies in their suit of insurance plans.

“Although we are the promoters of First Life Insurance, we support the move allowing banks to become brokers as this will give customers choice," said Andhra Bank Chairman Mr. C V R Rajendra.

Reacting on the finance ministry's move, Mr. Sam Ghosh, CEO of Reliance Capital, the promoter of Reliance Life and Reliance General Insurance, said, “By becoming brokers, banks would now be directly responsible for mis-selling as against earlier when they were seen to be acting as agents of insurance companies.
The insurance industry was split over the issue of banks distributing products of multiple companies. The bank-promoted companies favored banks being tied to one company, while the non-bank promoted insurers wanted an open architecture.

Source: http://www.insuringindia.com

Religare Health unveils -'Assure', a critical illness & personal accident plan

Private sector standalone health insurer Religare Health Insurance Company Limited has announced the launch of its new product - 'ASSURE', a Critical Illness and Personal Accident Plan for the retail market customers.

In the company's statement, the President and COO of Religare Health Insurance, Mr. Nitin Jain said, “This is another step towards our core objective of encompassing the entire spectrum of health & allied needs of our evolving customer segment with firm focus on providing hassle-free and quality service."

As per the statement, Assure offers a sum insured of up to Rs. 1 cr, which is the highest among currently available Critical Illness products. This plan also provides annual health check-up for the life insured at no extra cost. 'Zero day survival period', a unique feature of the plan, assures full payout of the sum insured if the life insured succumbs to an ailment without any condition for defined duration of survival, post diagnosis.

The company operates out of 43 offices, servicing more than 8 lac people across more than 300 locations. Religare Health Insurance has been awarded the 'Technology Innovation in Health Insurance Award' at the prestigious 'Indian Insurance Awards - 2013' and the 'Editor's Choice Award' by Finnoviti for 'Innovation in Product- Care'.

Religare Health Insurance is a joint venture between Religare Enterprises, one of India's leading diversified financial services groups; and two state-owned banks, Union Bank of India and Corporation Bank.

Tuesday, December 24, 2013

SBI Life receives warning from IRDA over ad norm violation

Insurance watchdog in India, the Insurance Regulatory and Development Authority (IRDA), on Thursday, issued a warning to SBI Life Insurance Company Limited against violations to IRDA (Insurance Advertisements and Disclosure Regulations) 2000.

The regulator in the warning note to private insurer said, “Your company is also advised to adhere to the best practices and comply with the provisions of Advertisement Regulations, Guidelines and circulars issued while releasing insurance advertisements."

Sales leaflets of the company were in violation of advertisement norms and were persistent in circulation for which it has issued a show cause notice earlier in August, IRDA said in the note, adding, “Your submissions that all the checks and balances in the form of Internal SQS Policies are in place and the stated approach aimed at curbing the wrong practices seem to be not effective at ground level."

Furthermore, the regulator said the Authority, however, is taking into consideration company's assurance that it is serious about stopping circulation of such leaflets and undertaking that it shall take all possible measures to ensure compliance to the said regulations.

DLF completes 74% stake sale in DLF Pramerica to DHFL

Country's largest real estate firm by market capitalisation, DLF Limited has completed the sale of its 74 percent stake sale in the insurance joint venture DLF Pramerica Life Insurance Company Limited to Dewan Housing Finance Corporation Limited (DHFL) and its group entities for about Rs 250-300 cr.

DLF had announced to sell its entire 74 percent stake in the JV in July this year. DLF in joint venture with US-based financial services company Prudential Financial Inc's subsidiary Prudential International Insurance Holdings Limited had started operation in September 2008.

Post transaction, the Mumbai-based DHFL, along with its promoters' entities, has acquired DLF's 74% stake in DLF Pramerica Life Insurance Company Ltd. In accordance with National Housing Bank requirements, DHFL has picked 50 percent, while, the two other promoters have acquired 12 percent each, DHFL said in a statement.

The newly formed joint venture company will be renamed to DHFL Pramerica Life Insurance Company Limited, subject to regulatory approval.

DHFL and Prudential Financial Inc said that they have closed their earlier announced joint venture transaction, following regulatory approval, to provide life insurance products to customers in India.

DLF has been selling its non-core businesses and assets such as hotels, insurance venture, plots and wind mills to reduce debt and focus on its core real estate business. It has raised about Rs 10,000 cr in last three years through divestment of its non-core assets.

During last two fiscal years, the insurance joint venture had registered a combined loss of over Rs 250 cr. According to the sources, with the exit from insurance business, DLF would not incur an annual loss of about Rs 100 cr.

During fiscal year 2012-13, DLF Pramerica Life had garnered first premium income of Rs 138.64 cr, a 35 percent increase over Rs 102.83 cr in the fiscal year 2011-12. The company issued 1,02,418 insurance policies in FY 2012-13 as against 69,926 in last fiscal. Company's share capital stood at Rs 320 cr at the end of FY 2012-13.