Thursday, March 21, 2013

MARCH 8 - 2013: International Womens day observed in Chennai At LIC BUILDING BY























ICEU, Chennai Division - I

IRDA panel for cutting compulsory cession to 5% 

A key committee of the insurance regulator has suggested halving of the compulsory reinsurance that Indian companies place with public sector GIC Re. This will create a larger business space for private and foreign reinsurance firms in the country.
The Reinsurance Advisory Committee of IRDA has suggested that domestic general insurers will now need to park only 5 per cent of their reinsurance business with GIC Re. This is, however, still short of what the general insurers want. They are clamouring for a complete phase-out of the decade-long practice of obligatory cession to GIC Re.
This will also benefit GIC Re as obligatory segment brings more losses for it. Although the business brings in an assured income for the national reinsurer, it also has to pay the claims in equal proportion. “The committee has now recommended a reduction in compulsory cession from 10 per cent to 5 per cent. Irda will have to take the final call now,” said the chairman of a leading general insurance company, who preferred anonymity.
According to GIC Re, the losses it has suffered due to obligatory cession of the business are pegged at Rs 4,537 crore for last five years. “Even on an accounting year basis, the claims out of the obligatory cession have not fully developed as yet and the figure for the same five year period is an alarming Rs 2,015 crore,’’ said AK Roy, CMD, GIC Re.
The question that arises then is why does GIC want cession to continue? “We have been suffering losses from the obligatory segment in the past few years. So, when we have stood with the market in the bad years, why should we leave it when the market is turning around? Though we do want to come out of the obligatory segment gradually, we want to (first) recoup our accumulated losses,’’ Roy argued. As general insurers were bleeding with underwriting losses, such 10 per cent obligatory business had become a liability for GIC Re in the previous year. The compulsory cession was 20 per cent earlier which was brought down to 15 per cent in 2007 and 10 per cent in 2008.

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.


Experts warn of sharp rise in health insurance frauds

Nine out of ten frauds in country's insurance sector occur in the mediclaim policy segment and there is a need to adopt measures to reduce the trust deficit between insured and insurer, experts have said.
"In insurance industry, number of grievances received or number of frauds committed is an indicator of growth trend of particular segment. In entire insurance sector, 90 per cent of frauds and grievances come from health policies," said Niraj Kumar, General Manager, Oriental Insurance Company.
He was addressing a seminar on health insurance at Amity University yesterday. Kumar said if one has to draw two curves for health insurance segment, one indicating growth and second learning curve, it can be observed that the growth curve is ahead of learning curve.
This, he added, implies that industry's main aim is only to sell and market health policies, but there are important takeaways in such shortcomings so that the level of mistrust between insured and insurer can be minimised.
Richard Kipp, Managing Director, consulting firm Milliman said, health insurance in India has increased tremendously] over few years but India needs to be cautious in its growth vis-à-vis the US where growth has now become stagnant.
Neeraj Basur, Chief Financial Officer, Max Bupa Insurance
Company said that there is lack of trust level among hospitals, third party administrators, insurance companies and customers.
The trust level has to improve and all stakeholders have to understand that it is the customer whose interest is the binding factor, he added.
R R Grover, Advisor, Amity School of Insurance, Banking &Nine out of ten frauds in country's insurance sector occur in the mediclaim policy segment and there is a need to adopt measures to reduce the trust deficit between insured and insurer, experts have said.
"In insurance industry, number of grievances received or number of frauds committed is an indicator of growth trend of particular segment. In entire insurance sector, 90 per cent of frauds and grievances come from health policies," said Niraj Kumar, General Manager, Oriental Insurance Company.
He was addressing a seminar on health insurance at Amity University yesterday. Kumar said if one has to draw two curves for health insurance segment, one indicating growth and second learning curve, it can be observed that the growth curve is ahead of learning curve.
This, he added, implies that industry's main aim is only to sell and market health policies, but there are important takeaways in such shortcomings so that the level of mistrust between insured and insurer can be minimised.
Richard Kipp, Managing Director, consulting firm Milliman said, health insurance in India has increased tremendously] over few years but India needs to be cautious in its growth vis-à-vis the US where growth has now become stagnant.
Neeraj Basur, Chief Financial Officer, Max Bupa Insurance
Company said that there is lack of trust level among hospitals, third party administrators, insurance companies and customers.
The trust level has to improve and all stakeholders have to understand that it is the customer whose interest is the binding factor, he added.
R R Grover, Advisor, Amity School of Insurance, Banking &Nine out of ten frauds in country's insurance sector occur in the mediclaim policy segment and there is a need to adopt measures to reduce the trust deficit between insured and insurer, experts have said.
"In insurance industry, number of grievances received or number of frauds committed is an indicator of growth trend of particular segment. In entire insurance sector, 90 per cent of frauds and grievances come from health policies," said Niraj Kumar, General Manager, Oriental Insurance Company.
He was addressing a seminar on health insurance at Amity University yesterday. Kumar said if one has to draw two curves for health insurance segment, one indicating growth and second learning curve, it can be observed that the growth curve is ahead of learning curve.
This, he added, implies that industry's main aim is only to sell and market health policies, but there are important takeaways in such shortcomings so that the level of mistrust between insured and insurer can be minimised.
Richard Kipp, Managing Director, consulting firm Milliman said, health insurance in India has increased tremendously] over few years but India needs to be cautious in its growth vis-à-vis the US where growth has now become stagnant.
Neeraj Basur, Chief Financial Officer, Max Bupa Insurance
Company said that there is lack of trust level among hospitals, third party administrators, insurance companies and customers.
The trust level has to improve and all stakeholders have to understand that it is the customer whose interest is the binding factor, he added.
R R Grover, Advisor, Amity School of Insurance, Banking &Actuarial Sciences, said there is an urgent need to address health insurance requirements of the urban poor.