Thursday, December 12, 2013

Meeting with Sri.B.S.Gnanadesikan TNCC president to support our struggle against the Insurance Amendment Bill on 30.11.2013.

Dr.B.R.Ambedkar rememberance convention held on 7.12.2013. Com.Beema Rao CPI(M) MLA and com.R.Govindarajan participated.



Meeting with Sri.Maitheryan MP, Rajaya Sabha leader of ADMK to seek his support to our struggle against Insurance amendment BILL. on 7.12.2013
       DR.B.R.AMBEDKAR MEMORIAL DAY CONVENTION-CHENNAI

A Convention was organised by the ICEU, Chennai Division-1, on December 7, 2013 to mark the death anniversary of Dr.B.R.Ambedkar. The meeting started after paying respects to the memory of Dr.Ambedkar and South African leader Shri Nelson Mandela, who passed away on December 5, 2013, by observing a minute’s silence. Com.S.Rameshkumar, General Secretary, ICEU, Chennai Division-1, welcomed the gathering and invited the guest speakers on to the dais. The meeting was presided over by Com.R.Kiran Kumar, Vice-President, ICEU, Chennai Division-1, who gave an introductory speech highlighting the educational background of Dr.Ambedkar both in India and abroad and appreciating his role in the formation of the Reserve Bank of India.
Com.K.Bhimrao, CPI-M MLA from a Chennai city constituency, recalled the stellar role played by Dr.Ambedkar in drafting the Constitution of India, his sincere efforts at unifying and organising a fight by eighty trade unions in Mumbai. He stood for the pre-eminence of the public sector in the country but the present rulers were following policies which were detrimental to the interests of the nation and its people. He decried the attempts of the government to destabilise the public sector LIC and asserted that defending the public sector LIC would tantamount to defending the nation and its people. Dr.Ambedkar firmly stood for providing rights to women including the right to property and also for protecting the women from social evils.. He appealed for launching powerful agitations to defeat the neo-liberal policies of the government and the domination by the upper class in society. He applauded the role played by the AIIEA and its Units in this fight.
Com.R.Govindarajan, former Joint Secretary of AIIEA, who greeted the Convention, referred to the fight put up by Shri Nelson Mandela against racial discrimination in South Africa and his suffering for 27 years in jail. He told the gathering that Dr.Ambedkar also fought against oppression on dalits; one has to ponder whether the thoughts and movements of Dr.Ambedkar are relevant today; even after 66 years of rule by the Nehru clan, even today dalits are being attacked and the bill for women’s rights was opposed by Congress M.Ps. The British exploited the differences among the population and after independence the ruling classes continued the same policies of divide and rule. Even among the leaders who fought for national liberation, there were some prominent leaders who fought against social transformation. After explaining the stand of Dr.Ambedkar on several issues including  planned economy, nationalisation of the insurance and similar other industries, temple entry by the dalits etc., he asserted that Dr.Ambedkar’s policies were quite relevant today. He also stressed the need to fight for distribution of land to the tiller. He praised the role played by the Units of AIIEA in Tamil Nadu in the activities of the Tamil Nadu Untouchability Eradication Front and gave out a clarion call for alternate policies.
Com.D.Ramesh, Joint Secretary, ICEU, proposed a vote of thanks.

            

Tuesday, November 12, 2013

 Social assistance by ICEU, Chennai Division-I

On November 5, 2013 relief work was undertaken by ICEU, Chennai Division-I for the people affected by fire mishap at Maduravoyal area of Chennai. Some huts in the DR.Ambedkar Nagar was completely burned down by fire accident recently during the Deepavali festival. All valuable belonging including clothes were burnt. As per the tradition of helping the people in need by our organization, on hearing the news it was decided by the insurance corporation employees’ union to help the hutment dwellers. So a relief camp was organized on the same day as mentioned. Com.Beema Rao., MLA CPI(M), representing the maduravoyal constituency in Tamil nadu legislature was the chief guest for the relief work. Com.K.Swaminathan General Secretary, SZIEF, Com.S.Ramesh Kumar General Secretary, ICEU, Chennai Division-I, Com.K.Sridhar Treasurer, Com.D.Ramesh Joint Secretary and others participated in the relief work.

Comrades of nearby branch (koyembedu, CBO.28) also participated.

Friday, October 25, 2013

Implementation of new norms for life insurance plans extended

Insurance regulator IRDA has extended the deadline for implementation of new individual product regulations for the life insurance industry by three months to December 31 to enable insurers to cope with the system readiness. After detailed examination of representations from insurance companies, it has been decided to allow the launch of products under the new regulations during extended period, Insurance Regulatory and Development Authority (IRDA) said in a circular.
The new guidelines are aimed at making insurance policies more customer-friendly. However, it said, insurance products with highest NAV (net asset value) guarantee and with fund level guarantees have to be withdrawn immediately and will no be sold from October 1. Products where benefits are linked to any external index have also to be withdrawn.
"All the existing group policies and all the existing individual products not in conformity with the provisions of this regulation shall be withdrawn from August 1, 2013 and January 1, 2014, respectively," IRDA said in a circular. With regard to group policies, the life insurers has been asked not to enroll these policies after the immediate policy anniversary falling due after July 2013. However, it said, all group policies at the time of renewal of such policy shall be given an option to switch over to the modified version of the group product, if any, once introduced. Those group policies which do not switch over the modified version may continue to be renewed under the old policy or closed to new members.
As per the new guidelines there will be three broad categories of products-- traditional insurance plans, variable insurance plans (VIPs) and unit-linked insurance plans (ULIPs). IRDA has mandated that the minimum sum assured or death benefit on a life insurance will not be less than 10 times the annual premium for individuals below 45 years of age. But for policies with tenors of less than 10 years, the sum assured limit has been reduced to five times the annual premium. The minimum death benefit in case of traditional plan is at least the amount of sum assured and the additional benefits, if any. In case of ULIPs, insurers will now have to inform policyholders about the reduction in yield of their ULIP on a monthly basis. As per the new norms, variable insurance plans will guarantee a certain minimum rate of return at the beginning of the policy, though they are linked to an index.

Insurance business in India may touch Rs 4 lakh cr in FY14: IRDA       Insurance watchdog IRDA today said it estimates the insurance business in India to touch Rs 4 lakh crore in the current fiscal. Insurance Regulatory and Development Authority (IRDA) Chairman T S Vijayan also said the regulator is mulling to bring out norms for sub-brokers of insurance products. He, however, did not put any timeframe for bringing out guidelines.  "October seems to be business is good for all companies, both life and non-life. Whole year there should be a good growth compared to last year. Last year industry has collected Rs 3.75 lakh crore," Vijayan said on the sidelines of a programme. When asked if the business would touch Rs 4 lakh crore in the current fiscal, he said: "Anybody's guess. It will be somewhere around that (Rs 4 lakh crore)."


Earlier in his address at the Indian Institute of Risk Management convocation ceremony, Vijayan said they are very keen to bring in regulation to tighten insurance products distribution system and are mulling to regulate sub-brokers also. "Similarly distribution also we are very keen that distribution channel should contribute to the development of the industry where agents or brokers which are the traditional models. We also brought out regulation for CSC (customer service centers) seriously looking at the sub-broker level," Vijayan said.
Later talking to reporters he said: "It (regulation for sub-brokers) is still under discussion. There is no timeframe for that.    "He said the regulator is working to see that both the insurance distribution and products come to a stage where they can contribute and address the real need of the customers propelling the industry to the next level of growth.  According to him the regulator approves products in such way that there is little or no scope for mis-selling the product.

Monday, October 14, 2013

LIC laps up Essar Power's bonds for Rs 1,000 crore                                     At atime when banks are wary of increasing exposure to the troubled power sector, the Life Insurance Corporation of India (LIC) has shelled out R1,000 crore to pick up Essar Power's entire 11-year rupee bond offering.

According to sources, LIC was the sole party solicited by Essar Power, which lured the insurer by offering an attractive coupon rate of 12.5% on the bonds — a near 200-basis-point premium to the coupon rate offered on similar rated paper in the market. Essar Power was assigned a credit rating of A+ by ratings agency Credit Analysis and Research (Care) in October 2012 in respect of the company's proposed R5,000-crore bond issue. Similar rated paper in the current market is priced at 10-10.5%.
India's largest life insurance company is expected to invest around R2.25 lakh crore in the current fiscal. Of this, R40,000 crore has been earmarked for equity investments, while the rest will go into debt instruments. Essar Power, a wholly owned unit of UK-listed Essar Energy, says the main purpose of the offering was to extend the maturity of their debt, rather than lower interest costs. While the interest payments are higher than the average coupon on similar bond offerings in the market, they are in line with the interest costs the company is paying on its existing debt. The average interest cost of the company's rupee debt is between 12.5% and 13%, confirmed company sources.
With banks tightening the flow of funds into the power sector, Essar Power has been eyeing bond offerings as an alternate source of funds. Essar Power has total debt of nearly $3 billion (R19,000 crore at current exchange rate). The company's debt service requirement stands at around R1,500-2,000 crore annually. Essar Power has detailed plans to raise R5,000 crore through bond issues and is half way through the plan, having raised R750 crore in July and R629 crore in May. The previous bond offerings had attracted financial investors other than LIC as well. This latest tranche issued to LIC will be repaid from 2017 to 2024, and will be listed on the Bombay Stock Exchange. Essar Power, which currently has a generation capacity of 3,910 MW, has plans to scale it up to 6,700 MW and is betting on the extra cash from its expansion plans to help service its debt in the future. Essar Power reported a net loss of R512 crore in fiscal 2013 vs a profit of R335 crore last year, citing higher interest costs and losses sustained by the company's Salaya power plant.

Private insurers cut down on branches, LIC ups the ante                        The number of branches operated by life insurers across India has come down by over 10 per cent in the last two years, primarily because of branch closures by private players even as state-run LIC expanded its footprint. The total number of branches or offices operated by private sector life insurance companies stood at 6,759 at the end of latest fiscal 2012-13, down by 1,416 branches from the level of 8,175 branches two years ago on March 31, 2011. During the same period, public sector player LIC's network grew by 155 to 3,526 offices as on March 31, 2013.

Despite LIC's expanded network, the cumulative number of offices for all life insurers fell by 1,261 in the last two financial years to 10,285 as on March 31, 2013, as a number of big private players, including ICICI Prudential, Bajaj Allianz and HDFC Standard Life, cut down on their branch network, shows an analysis of data available with various insurers and sector regulator IRDA. The number of branches operated by private life insurers declined by 950 during the last fiscal (2012-13) alone, while 463 offices were closed during the preceding fiscal as well. The business for many life insurance players has been stressed for last couple of years and could be a possible reason behind closure of branches. The data shows that the number of offices operated by ICICI Prudential declined by 845 branches between FY10-11 and FY12-13, while Bajaj Allianz's witnessed a reduction of 110 branches in its network during the same period. HDFC Standard and Reliance Life also saw their branch networks declining by 48 and 18, respectively. The few players that witnessed an increase in number of offices between past two fiscals included Birla Sunlife, IDBI, India First, Sahara, Shriram Life and Star Union.
While LIC has expanded its branch network in past two years, the number of its agents has actually declined in this period from about 13.37 lakh to nearly 11.73 lakh as on March 31, 2013.

Sunday, September 1, 2013



Aviva may exit India life insurance business-sources


Aviva PLC may pull out of its Indian insurance joint venture, valued at more than $500 million, as the British insurer retreats from less-profitable markets where it has struggled to expand, people familiar with the matter said.
Aviva, which aims to cut costs by 400 million pounds ($611 million) by year-end, is in the process of hiring corporate advisors to find buyers for its 26 percent stake in Aviva Life, its venture with Dabur Group, the sources told Reuters.
The insurer is considering various options, including selling its stake to Dabur Group if it fails to find a foreign buyer, one of the sources said. Dabur Group owns personal care and food products manufacturer Dabur India Ltd.
Aviva would be the third foreign insurer to quit India since 2012, stymied by regulations that restrict foreign ownership and fierce political opposition to changing those limits.
Aviva declined to comment. Mohit Burman, a director of Aviva Life who represents Dabur Group, was not immediately available for comment. The sources also declined to be identified due to the confidential nature of the matter.
The insurer had identified China and India as "high priority" and "must win" markets, but the move to sell out of India signals a change in that strategy.
Last year, Aviva hired former AIA Group Ltd CEO Mark Wilson to lead a turn around in its business which was hit by slower growth in its main market Europe.
Wilson joined after spiralling costs and poor share price performance triggered an investor revolt in 2012 that forced outthen-CEO Andrew Moss. This year, Aviva pulled out of its Malaysian insurance joint venture and exited from Russia.
TOUGH MARKET
Like many other foreign insurers, Aviva rushed into India after the government allowed foreign investment in the $40 billion-plus insurance market in 2000, lured by low penetration rates and the high savings rate in Asia's third-largest economy.
Life insurance penetration in India is about 3.4 percent of gross domestic product in terms of total premiums underwritten in a year, much lower than 8.8 percent in Japan and 8.7 percent in Britain.
Regulatory uncertainty, however, has proved tough for foreign insurers while insurance in general has failed to take off as expected among the public - the whole industry logged an accumulative $3 billion loss over the last decade.
Indian laws limit foreign ownership in domestic insurers to 26 percent. Government approval for a proposal to raise the limit to 49 percent has been pending for a long time due to opposition by nationalist politicians.
Insurers were also hit by a 2010 clamp-down on the sale of lucrative equity-linked products. Foreign firms remain overshadowed by state-owned Life Insurance Corp of India, which holds an almost 75 percent market share.
Foreign insurers including Britain's Standard Life, Canada's Sun Life, Prudential, Japan's MS&AD, Italy's Generali and Dutch insurer Aegon operate in India through joint ventures with local companies.
HSBC recently launched a process to sell its 26 percent stake in an insurance joint venture with two Indian state-owned banks. Dutch banking and insurance group ING and New York
Life have also exited their India insurance joint ventures.
Profit at Aviva's India unit fell by more than half in the financial year ended March 2013 to about 320 million rupees ($5.25 million), while total premium income dropped roughly 12 percent, according to company filings.

Tuesday, August 20, 2013

ICICI prudential gets over Rs 130 crore tax notice

The Finance Ministry has asked private sector insurer ICICI Prudential to cough up over Rs 130 crore for alleged evasion through non-payment of service tax.
The Directorate General of Central Excise Intelligence (DGCEI) has issued a show-cause-cum-demand-notice recently to the firm alleging irregularities including fudging records of commission paid to field agents or channel partners in lieu of policies being sold by them among others, official sources said.
Officials of the DGCEI, an investigative arm of Revenue Department under the Ministry, verified the accounts book of the company for the last five years--2007-08 to 2011-12—and claimed to have found irregularities vis-a-vis adherence to service tax laws.
The officials found non-payment of appropriate service tax on the commission paid to their channel partners for the generation of life insurance business and collection of service tax from their corporate agents without any authority in law and not depositing the same to the government nexchequer, they said.
"The DGCEI has raised a demand for payment of about Rs 136 crore on account of alleged service tax evasion to ICICI prudential," a source said. An ICICI Prudential spokesperson said the company will respond to the notice issued to it.
"The department has followed procedure by issuing the showcause notice. We will respond to the notice within the stipulated time period," an official company spokesperson told PTI in an email response.
The officials alleged that the company was paying huge sums of money to their channel partners under different heads in lieu of commission, thereby not paying service tax on the correct amount paid.
In some instances, up to 80 per cent of the premium paid by the unsuspecting customers was given to the channel partners as commission for the sale of life insurance products in gross violation of Insurance Regulatory and Development
Authority (IRDA) norms.The DGCEI, which began probe last year to unearth alleged service tax evasion by various life insurance firms, is likely to issue show-cause-cum-demand notices to other firms also, the sources said. Investigations have found alleged service tax evasion of at least Rs 300 crore by private sector life insurance companies.
The insurance companies under probe are found to be allegedly maintaining wrong data of commission paid and not paying service tax being deducted from their corporate agents, they said.
All life insurance companies are required to pay service tax at the rate of 12.36 per cent on the total commission paid to the corporate agents and the individual agents under the reverse charge mechanism, where as brokers and referrals are individually liable to pay service tax at the rate of 12.36 per cent on the commission amount received from the insurance companies.
At present, there are 24 general insurance companies including the Export Credit Guarantee Corporation (ECGC) and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country.



Govt's disinvestment lifeline LIC sees opportunity in market rout

Insurance behemoth Life Insurance Corporation (LIC) has stepped up the purchase of equities at a time when foreign institutional investors have been hitting the sell button. The state-owned insurer has bought equities worth Rs. 2,500-3,000 crore over the last seven days, sources close to the development told FE.
LIC’s buying accounts for more than half the R5,034 crore in equities bought by domestic institutional investors over the same period, according to Securities and Exchange Board of India data.
“LIC’s investment policy has been to buy when low, sell when high. This was certainly a good opportunity to buy good quality and quantity of stocks at a discount,” said a senior official at LIC, adding that in the wake of the recent market crash, blue-chip stocks were available at attractive valuations. Officials declined to offer insights into specific stocks that LIC may have bought into.
Interestingly, LIC’s pace of equity purchases in the last seven days is equivalent to what the life insurer typically buys over a month. In an interview to FE earlier this year, then-chairman DK Mehrotra had explained that LIC will target to invest R2.25-3 lakh crore by March 2014.
“Of that, about 10%, or about R25,000-30,000 crore, should go to equity,” Mehrotra had said. This would mean the insurer’s monthly equity investment budget would generally not exceed R2,500 crore.
In the past, the government has relied on the insurer to buy stocks when the markets were weak. LIC has also been a significant participant in recent public sector divestment issues such as MMTC where LIC reportedly picked up 25-30% of the issue by committing R200-250 crore.
However, very few of those investments are deemed profitable. As per stock exchange disclosures, Capitaline data and estimates from market sources, LIC is estimated to be sitting on a mark-to-market (MTM) loss of around R215 crore, having invested nearly R4,820 crore in the divestment offerings of FY13 that saw the government raise R23,778 crore.
All seven companies — Hindustan Copper, NMDC, Oil India, NTPC, Rashtriya Chemicals and Fertilizers, Nalco, and SAIL — in which LIC acquired a stake are trading below their respective floor prices.
Over the last one week, the capital markets have seen a steep sell-off due to heavy selling by foreign institutional investors after the US Federal Reserve announced a planned tapering off of its quantitative easing programme. For the week, the Sensex closed 2.1% lower while the Nifty ended 2.4% lower.
However, individual stocks have seen a far steeper sell-off, potentially presenting a good opportunity for long-term investors to buy.
Nifty stocks that have seen significant price falls this week include Bank of Baroda (13.3%), Punjab National Bank (10%), Hindalco (9.3%), NTPC (6%) and ICICI Bank (5%).

Saturday, May 11, 2013


Insurance Bill retains proposal to raise FDI cap to 49% 


Despite a parliamentary standing committee’s firm stand against hiking the 26% foreign direct investment cap in insurance, the government has decided to approach Parliament with its original proposal to hike the limit to 49%, considering the sector’s huge capital needs. Sources told FE that the Insurance Bill, listed for consideration and passing in the ongoing Budget session, proposes a composite foreign investment ceiling of 49%.
This means the government even negated a compromise formula that came up during informal discussions between the government and the Opposition to carve out a 23% window for equity holding by foreign institutional investors or overseas corporate bodies, while retaining the FDI cap at 26%. Of course, it remains to be seen if the government would be able to get the Bill passed, given that the BJP is unconvinced about the need to raise the FDI cap in insurance.
Finance ministry sources told FE that the composite cap of 49% foreign investment (including both FDI and FII components) was retained as the aim now is to get up to 49% FDI in the sector, which needs around $12 billion worth of capital by 2020.
“The sector, which is burdened with losses, urgently needs long-term capital for expansion and increasing penetration,” an official said.
“We cannot afford any provision restricting FDI to less than 49%, especially when the Indian companies are finding it difficult to raise capital,” the official said.
The compromise formula was considered following opposition from members of the parliamentary standing committee on finance, including
its chairman and BJP leader Yashwant Sinha, against any move to increase FDI in the sector from the present limit of 26%. In an interview to FE later, Sinha indicated his willingness to discuss the 26% FDI plus 23% FDI formula.
What has reaffirmed the government’s conviction regarding its move to permit up to 49% FDI in the sector is the large number of representations it received from foreign investors and insurance companies requesting not to reduce the FDI limit from the proposed 49% in the Insurance Bill, the sources added.
These representations said lowering the FDI limit from 49% for a political compromise would complicate matters and adversely affect the ability of the sector to raise long-term foreign capital. The Insurance Regulatory and Development Authority also backed the move to allow 49% FDI.
Those who argue that FDI and FII should be separate have concerns over the possibility of a single foreign investor getting a 49% stake in an insurance company, and at the same time two or more Indian entities being in the minority by sharing the remaining 51%.
However, Gautam Mehra, executive director, PwC, said, “If you give a 49% stake to foreign investors, they will be more comfortable and will get serious long-term investments.” Currently, even with 26% FDI, the foreign joint venture partners anyway have the ability to control the company through the power to appoint people to key positions such as the chief risk officer and the chief financial officer, he pointed out.
The advantage of the  composite foreign investment cap over separate boxes for FDI and FII is the flexibility the former offers.
an companies would prefer long-term foreign investment, which is FDI.


LIC selected as default NPS annuity service provider

Pension fund regulator PFRDA has chosen state-run LIC as the default annuity service provider for subscribers exiting from New Pension System (NPS) and seeking withdrawal of accumulated pension wealth.
PFRDA has empanelled seven Annuity Service Providers (ASPs) for providing annuity services to NPS subscribers.
While subscribers are required to select an empanelled ASP along with an annuity scheme from those offered by the chosen ASP at the time of exiting from NPS, PFRDA has now decided to assist subscribers by providing a default option.
"LIC has been chosen as the default ASP and is applicable for all variants of NPS. The default option is being purely provided in the subscribers' interest and to avoid any delay in claim processing," said a PFRDA official.
The default scheme offers annuity -- a policy by an insurer designed to provide payments to the holder at specified intervals -- for life with a provision of 100 per
cent of the annuity payable to spouse during his/her life on death of annuitant.
Besides LIC, other ASPs include SBI Life, ICICI Prudential Life, Bajaj Allianz Life, Star Union Dai-Ichi Life and Reliance Life Insurance.
Under the provisions of NPS, a maximum of 60 per cent of corpus accumulated at the time of exit, which is normally on the attainment of 60 years of age, can be withdrawn but a minimum 40 per cent of corpus has to be utilised for purchasing an annuity from one of the empanelled ASPs.
The NPS was introduced for the new recruits who join government service
on or after January 1, 2004. At the end of 2012, over 42 lakh subscriptions were enrolled with a corpus of over Rs 26,000 crore.
From May 2009, the NPS was opened up for all citizens in India to join on a voluntary basis.


ICICI Prudential Life Insurance barred for 3 yrs by Haryana govt


The Haryana government has barred ICICI Prudential Life Insurance for three years from doing any further business with it or any of its departments for "intentionally delaying" the process of distribution of annuity to land owners and failure to carry out commitments.
"ICICI Prudential Life Insurance Company needed to be blacklisted," the state's Finance Department said in a statement.
When contacted, the company declined to comment on the matter.
"The noticee can, however, opt to pay compounding fee in lieu of entire or a part of the black listing period within one month from the date of this order.
"...this is by paying penal interest at a rate of one per cent for every six months or part thereof of the blacklisting period proposed to be compounded, by making a request to the government in this regard," the statement said.
Such enhanced rate of interest would be payable on the amount advanced to noticee for the period from date of receipt of advance till the date of repayment of advance and interest at SBI base rate to the Department, it said.
Necessary orders for allowing compounding of the black listing period will be passed after receipt of the requisite compounding fee, it added.
An Expression of Interest was issued in February, 2011 inviting bids from insurance companies and banks for the purpose of providing services for disbursement of annuity to the land owners under the R and R Policy of the state government.
The bid-cum-tender document were submitted by ICICI Prudential on March 31, 2011.
Thereafter, several rounds of discussions were held between the noticee and the state government with respect to various stipulations and condition stated in the draft Services Level Agreement, it said.
This included the obligation of the noticee as the Service Provider with respect to collection and validation of data of the beneficiaries under the scheme of annuity, it added.


LIC books record profit of Rs 20,000 cr in 2012-13

The last financial year was among the best for LIC (Life Insurance Corporation) of India that booked a profit of Rs 20,000 crore — highest in around 7-8 years. The insurance behemoth now intends to invest Rs 2.15 lakh crore in the current fiscal out of which 10% or Rs 21,500 crore will be in equities.
According to LIC chairman D K Mehrotra, the insurance major got a lot of opportunities to book profits in FY13, which also saw the government-owned entity investing Rs 23,000 crore in equity. “The profit that we booked last year has been the highest in the last almost seven-eight years because we did get good opportunities” he told a leading business channel on Monday.
The head of LIC, who is due to retire next month, says the largest domestic institutional investor plans to invest about Rs 2.15 lakh crore in the market in the current financial year, of which 10-15% will be in equities. “This year we are proposing to put about Rs 2.15 lakh crore in the market and it will again depend on the opportunities when we get them... we have a thumb rule of putting 10-15% in equity and rest in other instruments,” he said.
Incidentally, LIC chief had told FE in March that FY14 should see LIC “having a total investment target of, say, Rs 2.25-2.3 lakh crore.”
“Of that, about 10% should go to equity. If something better comes, say, an IPO comes, we should raise it a bit. About Rs 25,000-30,000 crore,”
he had said when asked about the investment plans for the current financial year. It is widely believed LIC would be in focus once the divestment issues start hitting the market in the coming months. The government has set a target of Rs 40,000 crore by selling partial stake in listed PSUs. In FY13, LIC participated in seven divestment offerings - Hindustan Copper, NMDC, Oil India, NTPC, Rashtriya Chemicals and Fertilizers (RCF), Nalco, and SAIL.
Mehrotra, however, had denied being labelled the government’s “bailout agency” asserting that all of LIC’s investment decisions were based on its own assessment of market conditions and the fundamentals of the company.
“We are not in the business of bailing out. We take a very reasoned decision before entering the market and wherever we get a good opportunity, we participate. Only when somebody sells, somebody will buy and if that is called a bailout, then I can’t help it,” he had said last month.

ICICI prudential gets over Rs 130 crore tax notice

The Finance Ministry has asked private sector insurer ICICI Prudential to cough up over Rs 130 crore for alleged evasion through non-payment of service tax.
The Directorate General of Central Excise Intelligence (DGCEI) has issued a show-cause-cum-demand-notice recently to the firm alleging irregularities including fudging records of commission paid to field agents or channel partners in lieu of policies being sold by them among others, official sources said.
Officials of the DGCEI, an investigative arm of Revenue Department under the Ministry, verified the accounts book of the company for the last five years--2007-08 to 2011-12—and claimed to have found irregularities vis-a-vis adherence to service tax laws.
The officials found non-payment of appropriate service tax on the commission paid to their channel partners for the generation of life insurance business and collection of service tax from their corporate agents without any authority in law and not depositing the same to the government nexchequer, they said.
"The DGCEI has raised a demand for payment of about Rs 136 crore on account of alleged service tax evasion to ICICI prudential," a source said. An ICICI Prudential spokesperson said the company will respond to the notice issued to it.
"The department has followed procedure by issuing the showcause notice. We will respond to the notice within the stipulated time period," an official company spokesperson told PTI in an email response.
The officials alleged that the company was paying huge sums of money to their channel partners under different heads in lieu of commission, thereby not paying service tax on 
the correct amount paid.
In some instances, up to 80 per cent of the premium paid by the unsuspecting customers was given to the channel partners as commission for the sale of life insurance products in gross violation of Insurance Regulatory and Development
Authority (IRDA) norms.The DGCEI, which began probe last year to unearth alleged service tax evasion by various life insurance firms, is likely to issue show-cause-cum-demand notices to other firms also, the sources said. Investigations have found alleged service tax evasion of at least Rs 300 crore by private sector life insurance companies.
The insurance companies under probe are found to be allegedly maintaining wrong data of commission paid and not paying service tax being deducted from their corporate agents, they said.
All life insurance companies are required to pay service tax at the rate of 12.36 per cent on the total commission paid to the corporate agents and the individual agents under the reverse charge mechanism, where as brokers and referrals are individually liable to pay service tax at the rate of 12.36 per cent on the commission amount received from the insurance companies.
At present, there are 24 general insurance companies including the Export Credit Guarantee Corporation (ECGC) and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country.

Monday, April 8, 2013


18th working women convention in Chennai.
WOMENS CONVENTION IN CHENNAI DIVISION-I
18th Working Women’s convention was held  in a fitting manner by the divisional women sub committee of ICEU, Chennai Division-I, on April 6, 2013. Addressing the convention  meeting held in the LIC Building canteen hall in Chennai, Com.U.VASUKI, National Secretary, AIDWA, enumerated a large number of incidents of sexual and other modes of violence perpetrated against women and female children reported almost daily throughout the length and breadth of the country and called for stringent law to punish the culprits. She felt that there should be shift in the mind-set of the population to ensure that women are given equal rights and due respect and treated with dignity in all spheres. She hailed the recent judgment by Hon’ble Supreme Court in the Novartis Case for patents in the generic drugs. The Supreme Court pronounced this judgement based on the Intellectual property Act of 2005. This act was enacted because of the pressure of the left parties. The central government is acting in a manner to help the rich corporate. The announcement of decontrol of sugar is such a measure. This move will hit the common man. The worst of suffers of this move will be women. The UPA government is not so serious in incorporating all the suggestions given by the Retired Justice Verma committee recommendations to stop the violence against women. The hurriedly brought a ordinance which omitted important and far reaching proposals such marital rape, voyeurism and stalking. This omission amply proves without doubt the insincerity of the government. As you all are working in a organisation with a strong trade union the women’s here are in a better position. But the women working in out side need your help more. So I request the women sub committee of ICEU Chennai division-I to take more proactive role in organising unorganised women in this part of the world.
The report was submitted by the convenor of women sub-committee com.S.Revathi. four women comrades participated in the discussion. Com.S.Ramesh Kumar summed up the debate and the report was adopted unanimously. Then com.K.Swaminathan General secretary, SZIEF greeted the conference. The congratulated the women sub committee for the massive participation of women comrades in the convention. When the decision to form women sub committee was taken in the 1988 in Jaipur conference, it was taken with a forethought to involve women in the union activities and make them leaders of the organisation. Today ICEU, Chennai I was leading in it. Out of the total 70 branch level office bearers in Chennai division-I 33 positions were occupied by women. This shows the growth. They should come to next tire of leadership.
Then com.Sarvamangala, convenor, Women’s sub committee, ICEU, Chennai Division-II greeted the convention. Eight resolutions were moved by Com.Manjula, Joint convenor and seconded by another joint convenor Com.Lalitha was unanimously adopted. Notable among them was a resolution urging central government to include all the recommendations made by justice verma committee in the law to prevent crimes against women.
Com.S.Revathi, Convener, Working Women’s Sub-Committee, ICEU, Chennai-I, along with other joint convenors Com.Lakshmi, Com.Manjula, and Com. Lalitha who were in the presidium conducted the proceedings.
Earlier com.S.Revathy convenor welcomed the gathering and vote of thanks was proposed by com.Manjula, joint convenor.
The convention elected Com.Manjula as new convenor and eight joint convenors were also elected for the ensuing year.
A large number of men and women comrades attended the meeting. A good number of women working in distant Branch Offices came to the venue of the meeting.