Insurance watchdog IRDA on Friday said the guidelines for public float of life insurance companies will be ready this fiscal, while the non-life may take more time. "Initial Public Offering (IPO) guidelines for life insurance companies will be out soon. Certainly before this fiscal. Non-life will take time," Insurance Regulatory Authority of India (IRDA) Chairman J Hari Narayan told reporters in New Delhi.In October last year, market regulator Sebi had approved life insurance companies to issue IPOs.As per the draft guideline compiled by IRDA, insurance companies that are in operation for the last 10 years would only be eligible for coming out with IPOs."Companies will meet the 10-year deadline by July-August this year. The 10 years (in business) clause stands. As law stands 10 years is 10 years. Companies can go ahead with the IPO without the passage of Insurance Bill," he said.Also, the present IPO guidelines of Sebi requires a three years track record of profit for a company to float a public issue.However, the non-life insurance companies will have to wait a few months to hit the capital market as Irda is in the process of making a formal proposal to Sebi.everal private sector insurers, including Reliance Life and HDFC Standard Life, have already shown interest in tapping the capital market to augment their resource base.Though HDFC Standard Life has completed 10 years of operations, Reliance Life does not meet this criteria.As per the disclosure norms in offer document mandated by Sebi, the insurers would have to come up with disclosure of risk factors specific to the companies.Also the offer document would have a glossary of terms used in the insurance sector.Currently, most of the 22 private life insurers and 17 non-life players have foreign partners. The Insurance Act caps foreign direct investment at 26%.
Sunday, January 23, 2011
Thursday, January 20, 2011
.No sooner was the wasted winter session of parliament adjourned sine die, the price of petrol was hiked by Rs 2.95 per litre. Now as mahara sangranthi(pongal) gift to people of India again petrol price was hiked by another Rs.2.55. This is the sixth increase in the price of petrol since June 26, when this UPA government deregulated the prices of petroleum products, thus, allowing them to rise according to market conditions. These hikes together mean that the price of petrol has risen nearly by Rs 11 during the last five months. Reports indicate that the price of diesel is also likely to be hiked soon. Clearly, despite the deregulation, the government is timing the price hikes in order to avoid the political costs of such hikes during a parliament session.
This constitutes a cruel attack on the livelihood of a vast majority of our people. With the prices of all essential commodities continuing to rise, these hikes in petroleum products will further contribute to inflation eating into the real earnings of the people. Ironically, the finance minister expressed happiness at a eleven-month low rate of inflation that stood at 7.48 per cent in November this year. This, however, cannot mask the reality that general inflation rate has been hovering above the 10 per cent level and food inflation has been close to 20 per cent during the course of the last one year.
Restructuring of the tax regime currently in operation in the petroleum sector is required in order to provide some relief to the people. While the government has deregulated the prices, it has done nothing to restructure the taxes. The net result is that the burden of taxes is being borne by the people while the government reaps a bonanza of revenues. The government’s argument that these revenues are required to meet the expenditures in the social sector is, to say the least, totally untenable. Vast multiples of what the government spends in the social sector are being looted through various scams. The 2G spectrum scam alone is nearly 20 per cent of this year’s budgetary expenditures!
A government that has assumed office in the name of the aam admi is imposing cruel hardships on the vast majority of our people. Relief can be provided to the people if the government immediately releases the excess stock of foodgrains lying in its godowns to be distributed through the public distribution system at BPL prices. According to the last reports, as against the buffer norm of 200 lakh tonnes of rice and wheat, the stock in the godowns was over 475 lakh tonnes. This measure along with a withdrawal in the hike of petroleum products will result in some relief to the people.
Additionally, it is absolutely necessary to prohibit growth of speculative trade in essential commodities. The cumulative value of trade in agricultural commodities during the year from April 1 to November 30 was Rs 8,36,605.53 crores. In the corresponding period last year, it was Rs 7,66,133.46 crores. Clearly, there are super profits in such speculative trading, the cost of which is borne by the common people through rising prices.This UPA-II government, however, continues to remain not merely insensitive to growing agonies of the people but is imposing policies that are adding to people’s woes.
Posted by cheran at 6:41 AM
NEW DELHI: With the recent uproar on rising food and vegetables prices providing a handy trigger, the Manmohan Singh Government is all set to give its approval to 51 per cent Foreign Direct Investment (FDI) in the multi-brand retail sector with the Commerce and Industry Ministry likely to move a Cabinet note next week.
Highly placed sources in the Ministry said the move to open up the multi-brand retail sector, a politically sensitive issue, comes following “feedback” received from State governments which have argued that allowing foreign investment in retail would improve the required infrastructure and provide a remunerative price to farmers for their produce.
What has also emboldened the Centre is that the Narendra Modi Government in Gujarat and the Akali-BJP alliance Government in Punjab are in favour of opening up the sector despite the BJP's opposition to this policy at the national level.
“We have firmed up our views on the issue and are likely to move a Cabinet note later this week or early next week proposing allowing of 51 per cent FDI in multi-brand retail,” a senior official explained to The Hindu. “The note will be sent to various Ministries for their comments and then the Cabinet Committee on Economic Affairs will be moved for a policy decision. We are hoping the matter will form part of the budget announcements as the Finance Ministry as well as the Agriculture and Food Distribution and Consumers Affairs Ministries are strongly backing such a move.”
The Government is proposing some safeguards to ensure that non-serious players and fly-by-night operators are not entertained. To this end, any player who seeks entry into the Indian market will be required to invest a minimum of Rs. 500 crore. The Government is also seeking certain other investment commitments, including establishing back-end cold chain outlets.
Last year, Prime Minister Manmohan Singh sought a debate on opening up the sector, pointing to the vast difference between farmgate and consumer prices. The Department of Industrial Policy and Promotion, under the Ministry of Commerce and Industry, floated a concept paper inviting comments from various stakeholders on allowing FDI in multi-brand retail.
Later, a committee was constituted under the Ministry of Consumer Affairs and Public Distribution, which has prepared a draft report after taking into consideration the concerns and viewpoints of all stakeholders concerned, officials said.
Though 100 per cent FDI is permitted in cold chain through the automatic route in the absence of FDI in retail, the flow of such funds to the sector has been insignificant. The present FDI regime allows 51 per cent foreign investment in single brand retail and 100 per cent in wholesale cash and carry.
The Ministry of Consumer Affairs and Public Distribution initially suggested a cap of 49 per cent FDI in multi-brand retail, while the Micro, Small and Medium Enterprises Ministry's recommendation is for 18 per cent FDI. But the recent skyrocketing of food prices — especially those of onions — and the declining inflow of FDI have opened a door for the Government to take a more ambitious decision on the prickly issue Courtesyz: The Hindu
Posted by cheran at 6:04 AM
Wednesday, January 19, 2011
A human chain programme was organised by Insurance Corporation Employees' Union, Chennai Division-I on 19th January 2011 in front of LIC Building, Anna Salai(Mount Road), Chennai-600002.on the 56th formation day of LIC. In the year 1956 on 19 th January the then central government headed by Pandit Jawaharlal Nehru nationalised the life insurance industry. To commomemrate the day the human chain programme was organised. The main demands were to withdraw the two bills related to innsurance industry pending before the parliament and strengthening the Public Sector insurance companies There was a massive participation of the employees in the human chain.The LIC Class-I officers association, The agents organisation and others also participated .
Earlier a meeting was organised under the presidentship of Com.G.Jayaraman (President,ICEU). Com.K.Swaminathan, (General Secretary,SZIEF), Com.J.Arivalagan(National Secretary IT/admn), Com.Damodaran (Divisional secretary,LICOAI), greeted . Women comrades were present in large numbers.Com.S.Ramesh Kumar (General Secretary) welcomed the gathering.
Posted by cheran at 6:18 AM
Tuesday, January 11, 2011
Anil Dhirubhai Ambani Group company Reliance Life Insurance has emerged as the leading private sector insurer in the country in terms of the number of policies it sold in the first eight months of the current financial year.
Reliance Life Insurance sold 13,12,389 policies between April and November, 2010, as against 12,61,668 in the corresponding period last year, according to IRDA data.
"Our wide-ranging products, catering to every section of the society, and pan-India presence with quality service helped us notch up this business milestone," Reliance Life Insurance Executive Director and President Malay Ghosh said.
Reliance Life was followed by Bajaj Allianz and ICICI Prudential, which sold 9,49,183 and 8,26,904 policies, respectively, between April and November this year.
Nevertheless, the country's largest insurer, Life Insurance Corporation, continued to lead the pack when it came to policy sales, notching up 1,93,54,765 new customers in the first eight months of the ongoing fiscal, down 1 per cent from 1,95,77,088 a year ago.
However, the insurance industry as a whole saw a 6 per cent dip in policy sales to 2,63,51,967 in April-November, 2010, from 2,78,91,082 in the same period last year.
In terms of premium collections during the April-November period, ICICI Prudential was the top private player, mopping up Rs 4,053 crore, while SBI Life garnered Rs 3,952 crore.
They were followed by HDFC Standard Life (Rs 2,150 crore), Bajaj Allianz (Rs 2,033 crore) and Reliance Life Insurance (Rs 1,791 crore) in terms of total premium collection for the eight-month period ended November, 2010.
LIC collected a total premium of Rs 55,513 crore during the April-November period this year.
Overall, the 23 life insurers in the country collectively mopped up Rs 76,990 crore as new first-year premiums during the period, a 39 per cent increase from Rs 55,357 crore in the year-ago period.
The private sector, comprising 22 life insurers, collectively registered Rs 21,476 crore worth of new business in the April-November period as compared to Rs 18,908 crore a year earlier, translating into a growth of 14 per cent, according to IRDA data
Posted by cheran at 6:42 AM
Saturday, January 8, 2011
The 16th working women convention of the ICEU, Chennai division - I will be held on 22nd Jan.2011 saturday at LIC Building canteen hall, Anna Salai, Chennai - 600002. The Convention will be inagurated by com.N.Nanmaran, M.L.A., belongs to the CPI(M). AIIEA South Zone General Secretary Com.K.Swaminathan will greet the convention.
S. Ramesh Kumar
Posted by cheran at 9:18 AM
. As 2010 year ends it is time to look back and evaluate how we did in our lives , our relationships , our finances , our careers. In same way it is time to see how our country did in various arenas.
As we look back in year 2010 , it is unfortunate that this year might go down as being year of scams. Tough most of scams were in making much before 2010 ,2010 was absolutely exciting for media , frustrating for Indians and year for resignation for many politicians.
Let us look at various allegations of scams which came to light in 2010
1) Common Wealth Games :
Britishers in their peak introduced common wealth games during 1930s. Little did they know that common wealth terminology would be adapted years down the line and little did terminology investors know that common wealth would be taken literally by kalmadi and his associates. Allegations on them is that they made lot of wealth from common wealth games. Investigations are still on and kalmadi maintains that he did nothing wrong
2) 2G Scam:
Raja , raaj karen , hum hai raja . Song from kamal hasan’s aappu raja applies perfectly to Raja of DMK. Seems to be have taken word so literally that he didnt listen to even prime minister of India. Dubbed as mother of all scams the money involved is 1.76 lakh crores.
Raja’s episode also brought into light Niira Radia Tapes. Though it was an accident that her phone was tapped for money and what we all got was how lobbying was done and how corporates operate via lobbyist to make sure their favorite politician becomes minister of particular department.
3) Adarsh Scam :
If 2g and cwg was shocker , adarsh was disgusting. Plot taken in name of martyrs , adarsh scam saw all whose who from politicians to IAS to IPS to even ex army personnel getting into it. Sonia Madam took high moral ground of sacking ashok chavan but remained silent on why since shindes and deshmukhs scam was not unearthed.
4) Karnataka Scam :
Why should congress have all the fun wondered yeddy. His son was given bunglow , his daughter was given plot to open BPO. yeddy survived and still is chief minister of karnataka. Yeddy did give sonia gandhi a breather and she uses his name in her speeches to show that congress is better than BJP. On what grounds?. Well congress atleast sacks people once media blow the whistle!!!!!!!!!!
5) UP Food Scam :
How can year end when states like maharashtra , karnataka are having all the scams and most populous state’s name is not even mentioned. If 2g scam is mother of all scams , up food scam is grand daddy of all scam considering the money involved. The scam is said to be worth of 2 lakh crores. So when raja is alleged to have used modern way of making money , up used age old way. The food acquired to be distributed in primary schools ended up being sold in market!!!!!!!!!!
Mayawati too high moral ground by stating that it was she who had ordered inquiry. Mulayam struck back stating that it was he who ordered inquiry while sharad pawar stated that his job was only to supply and how to use was state subject!!!!!!!!!!!!!!!!!
So it is raining scam and amidst all these scams Ramalinga Raju seems to be angel . Let us see what 2011 shows to us…
Posted by cheran at 9:09 AM
Insurance regulator Irda today asked insurance companies to refrain from charging policyholders differential premium without prior approval of the watchdog.
In the papers submitted to Irda before launching any product, insurers mention a range within which the premium rates would vary depending on unfavourable risk factors.
"It should be ensured that no premium quotation is given which is outside the range filed with Irda and a rate which the underwriter and Appointed Actuary did not approve," the Insurance Regulatory and Development Authority (Irda) said in a circular issued to all general insurance companies.
Irda asked insurers to market their products in accordance with the terms and conditions as approved by the watchdog.
However, Irda has noticed that some insurers offer premium rates outside the range filed with Irda, offer discount in premiums and offer enhanced benefits on the product without charging any premiums.
"This is unhealthy practice, which besides attracting regulatory penal action, will impact the financials of the insurer, ultimately affecting the interest of the policyholders and shareholders as well. Such practices should be stopped forthwith," the circular said
Posted by cheran at 9:00 AM
Each one of us has different rationale or purpose for availing insurance. The reasons could vary from securing ones retirement, meeting children’s education or marriage expenses or to secure one’s life. Therefore, when the proposed Direct Tax Code (DTC) becomes effective from April 1, 2012, one should assess the impact of insurance plans and take informed decisions while continuing with existing investments and for future plans.
Under DTC, the amount received under a life insurance policy would be taxed on maturity as normal income, if the premium payable in any year, during the policy term exceeds 5% of the sum assured. As per the current taxation laws, receipts from a life insurance policy are exempt from tax provided the premium payable for any of the years does not exceed 20% of the sum assured.
In case of policies which are not exempt, the amount of premium paid (up to the date of receipt of the proceeds) would be allowed as a deduction from the proceeds received under the insurance policy. i.e. if the amount received on maturity is Rs 5,00,000 and total premium paid is Rs 2,20,000, the amount taxable will be Rs 2,80,000 (5,00,000—2,20,000). However, this deduction would not be available to any amount of premium, which has already been allowed as a deduction in any previous financial year.
The maximum limit for deduction for investments in life insurance would be Rs 50,000, in addition to the deduction of Rs 100,000 available for contribution to certain approved funds. However, the limit of Rs 50,000 is a combined limit for life insurance, health insurance and tuition fees. For instance, if one makes an annual contribution of Rs 80,000 towards life insurance premium and Rs 20,000 towards provident fund, currently, the maximum deduction he would get would be Rs 100,000, but under the DTC he would get a deduction of Rs 70,000 only.
For equity-oriented life insurance schemes (where more than 65% of the total proceeds are invested in equity shares) an income distribution tax of 5% has been introduced. The income distribution tax is payable by the insurance companies. However, the distributions or payments on which such income distribution tax is paid will not be taxable in the hands of the policyholders.
The DTC is still in draft stage and may undergo further changes, more so, as India does not have a well designed social security system in place, it is important to create a retirement basket. Thus, tax payers would need to wait and watch to find out what is in store for them in the DTC
Saturday, January 1, 2011
Reuters | 2 Days Ago
.A payments dispute between India and Iran escalated after Tehran refused to sell oil to India under New Delhi’s prohibitive new rules, sources on both sides said on Wednesday.
The Indian sources said officials from the central banks of the two countries will meet on Friday as Iran seeks to rescue trade worth around $12 billion (£7.7 billion) a year, at risk from rising U.S. pressure on countries trading with Iran to abandon all dealings.
Last week, the Reserve Bank of India said deals with Iran must be settled outside the Asian Clearing Union (ACU) system, used by central banks of member nations to settle bilateral trades.
Analysts predicted talks would be tough and that New Delhi may face a costly bill if it abandons Iranian oil imports.
Iran is under global pressure over its nuclear programme, and though United Nations sanctions do not forbid the purchase of Iranian oil, the United States has pressed hard for governments and companies to stop dealing with Tehran
India is the biggest buyer of Iranian crude among ACU members, with state-owned refiners and privately owned Essar Oil taking around 400,000 barrels per day.
Two Indian industry sources said on Wednesday that National Iranian Oil Co (NIOC) had turned down Indian oil firms’ request for payments outside the ACU. The ACU includes the central banks of India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.
"Indian firms had asked Iran to immediately nominate a bank in Europe through which payment can be made. But NIOC refused," said one of the sources.
When asked if NIOC was willing to accept any mechanism outside the ACU, a NIOC source said: "It is not acceptable to NIOC as this exercise...(has been)in place for so many years."
Iran’s central bank requested a meeting with its Indian counterpart, a Reserve Bank of India (RBI) spokesperson said, adding no date had been set.
But an oil industry source, who will take part in the meeting, said the talks would be on Friday in Mumbai.
He said India’s oil ministry has suggested that RBI stick to the old mechanism of guaranteed payments for oil for now.
Ambika Sharma, Deputy Secretary General at the Federation of Indian Chambers of Commerce and Industry, said: "The two central banks could look at settling the trade transaction in a currency other than the euro and the U.S. dollar"
Indian analysts said the oil dispute was the result of U.S. pressure on the international community to stop dealing with Tehran to force it to abandon its nuclear programme.
The White House on Wednesday praised the Reserve Bank of India for reducing its dealings with Iran’s central bank.
"We think the Reserve Bank of India has made the right decision to carefully scrutinize and reduce its financial dealings with the Central Bank of Iran," White House spokesman Tommy Vietor said in an email.
"This latest action adds to the growing list of companies, financial institutions and governments that are increasingly concerned about Iran’s misuse of trade and financial relationships to support illicit activity, including its nuclear programme."
Tehran says it pursues only peaceful goals and is not trying to build a nuclear bomb.
U.S. President Barack Obama visited India last month and promised to help New Delhi boost its global role, including by supporting its bid for a permanent U.N. Security Council seat.
"Iran is already struggling to place their crude in the market, and any stoppage of supply to India will further escalate the problem specially when series of sanctions are imposed on them," said Praveen Kumar, who heads consultancy FACTS Global Energy’s South Asia oil and gas team.
However, India would not want to see ties fray with Tehran, which it sees as an ally in stabilising Afghanistan after U.S. troops leave in 2014. It is also sensitive to internal criticism that the decision was taken due to U.S. pressure
Posted by cheran at 10:14 AM