Private sector insurer Reliance Life Insurance, an arm
of Anil Ambani-led Reliance Group's financial services firm Reliance Capital
Limited has recently announced the launch of its new traditional
non-participating product-Super Money Back.
This plan provides guaranteed money back benefits to policyholders after a
block of every five years throughout the policy period in addition to an
increasing monthly income that starts after the premium payment term.
Reliance Super Money Back policy also provides life insurance cover for the
entire policy term by paying premiums for just half of the opted policy tenure.
Customers in the age group of 18 to 55 years can buy this product. The minimum
sum assured under the policy is Rs. 1,00,000; and the policy term can be opted
from 10, 20, 30, 40 or 50 years.
With a view to raise insurance penetration in rural
area the Insurance Regulatory and Development Authority (IRDA) on Thursday
rolled out simplified, standard products tailored to be sold by life insurance
companies through about one lac Common Services Centers (CSCs). Two types of
products a term plan and a saving plan will be sold through this
distribution network. These low ticket size cost effective products are
especially designed to suit the target population.
As per the IRDA notification, the products sold through this distribution model
shall be prefixed with the word 'CSC', so that these products can be easily
distinguished. “Every insurer shall file the products under the current file
and use procedure for distribution under this channel," the circular said.
CSC distribution model is not mandated by the regulator, it's totally on
voluntary basis. Besides the commission to be paid to CSC to procure the new
business, there would be service charges for post sale services of the policy.
The maximum commission under these policies would be 5% of the premiums paid in
the first year. And, from second year onwards, there shall be no commission.
The service charges would be fixed for every activity undertaken by the CSC.
For term insurance plan, the maximum sum insured would be rupees two lac. And
for saving plans, the maximum premium would be Rs. 20,000, and the policy
period would be between 5 to 15 years.
In order to smooth
processing of claim settlements, life insurance companies in India consider
suicides at par with natural deaths and not as accidental deaths.
As per senior officials from the industry, for a smooth claim settlement it has
to be proved that the life insured has committed suicide. It is because there
is a conception that most suicides are not pre-meditated.
Although, during the settlement of claims where the insured dies because of
suicide, the insurers look at how old the policy is. Because in suicidal case,
the insurers have a waiting period of one year; and only after the period they
settle claims. It means if an insured commits suicide within one year of buying a life insurance policy, and it is proved that the insured had indeed committed
suicide, the nominee in the insurance policy will not be able to get any amount
from the insurer.
Further, the officials said that some life insurance products come with double
accident claim benefits. In case of a suicide, the nominee in the policy cannot
claim the extra sum assured for accidental deaths. In cases where the death is
not due to natural causes and also it is not proven to be suicide, it is
accepted as an unnatural death and extra claims for accidental deaths usually
paid.
In protest against levy of service tax on insurance
premium with effect from January 1, 2014, LIC agents from Tamil Nadu, Kerala
and Puducherry gathered at Chennai on Friday. The rally led by Southern Zone
President of Life Insurance Agents' Federation of India (LIAFI) Mr. V. Ganeshan
sought immediate withdrawal of the introduction of service tax of 3.09 % on
insurance premium.
“At a time, when we are asking the management to extend more benefits to the
policyholders and introduce user-friendly policies, the introduction of service
tax of 3.09 % on traditional products is unnecessary. It will pinch their
pockets as it is an extra burden. This will force most of them to discontinue the
policies. There are over 11.4 lac LIC agents in the country and equal number of
agents in the private sector. LIC has 30 crore policyholders and they should
not be exploited in the name of new taxes", said LIAFI president Mr. H.M.
Jain at the Golden Jubilee celebrations of southern zonal council meet.
The service tax would affect LIC's business as more than 20 crore policy
holders are from lower and middle income groups, said Mr. Ganeshan adding, “In
the coming days, it might delay settlement of death claims or maturity claims
and even affect LIC reserves too."
With a view to curb money-laundering through insurance,
the Insurance Regulatory and Development Authority has asked private player
Birla Sun Life Insurance Company to adopt affective procedure to know source of
funds by policyholders and not merely rely on documentation for premium payment
of over rupees one lac per annum.
“Authority advises Birla Sun Life Insurance Company to lay adequate emphasis on
effective procedures for strengthening the compliance norms of the AML
(Anti-Money Laundering) master circular and all subsequent regulatory
instructions issued on this matter from time to time,“ the regulator said in a
recent order.
It is believed that the new IRDA order is an implication of a news last year
that had accused 23 leading banks and insurance firms including Birla Sun Life
Insurance Company of 'running a nationwide money-laundering racket, blatantly
violating laws of the land'.
According to the news published on a web-portal, the financial entities offered
to open bank accounts and lockers without following Know Your Customer (KYC)
norms, convert black money into white and obtain fictitious PAN cards.
The regulator, in a separate order, guided Future Generali India Life Insurance
to put in place fair compliance system while submitting information to the
Authority.
Further, the order said that the company during the hearing discovered the fact
that there was a procedural lapse while exercising the due diligence when
forwarding the referral application to the Authority.
