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.

‘DHARNA’ IN CHENNAI PRECEDING THE TWO - DAY STRIKE ACTION

As  a forerunner to the two-day strike on February 20 and 21, 2013 by the entire trade union movement of the country including the insurance employees against the anti-people and anti-worker policies of the Govt. of India heaping untold miseries on the nation’s population, a ‘Dharna’ programme was organised in front of the LIC Building, Chennai, by the ICEU, Chennai Division-I, from 2-00 PM to 5 PM on February 16, 2013. The meeting as part of the programme was presided over by Com.G.Jayaraman, President, ICEU, Chennai Division-I. The leaders including Com.N.M.Sundaram, former President of AIIEA and the gathering of employees present were welcomed by Com.S.Rameshkumar, General Secretary, ICEU, Chennai Division-I

Greeting the participants, Com. K.Swaminathan, General Secretary, South Zone Insurance Employees’ Federation, dealt with a wide variety of ills afflicting the nation due to the neo-liberal policies being ruthlessly implemented by the ruling coalition at the Centre. As far as the insurance and banking sectors are concerned, he recalled the days when these two vital sectors were in the hands of private big business magnets who indulged in all sorts of frauds forcing the Government of India to nationalise these sectors. The Government is now determined to entrust these sectors in the hands of the same private entities despite the   finance and insurance companies totally collapsing in the USA. He said that the Global Trust Bank, inaugurated by the Prime Minister when he was the Finance Minister of the country, was nowhere to be seen in the country.

Com.A.Soundararajan, CPI (M) MLA and General Secretary of the Tamil Nadu State CITU, blasted the policies of the Government, which had resulted in pauperisation of the country. He ridiculed the claim of the rulers that the country had achieved growth in employment and said that in the southern part of the country although it was claimed that two lakh new jobs had been created, not even 25% were permanent jobs and the salaries paid were very low. The rest of the jobs were on temporary, part time  and contract basis. He also made it known that even though the labour laws are not being enforced making it difficult to organise trade unions in newly formed industries, the CITU had succeeded in forming unions in several industries in Tamil Nadu.

The ‘Dharna’ programme, participated by a huge number of men and women comrades, came to a close with the vote of thanks proposed by Com. C.M.Kumar, Vice-President, ICEU, Chennai Division-I. A note-worthy feature of the whole programme was the presence of a large number of representatives of print and electronic media who interviewed the leaders and helped to give wide coverage for the issues involved in the two-day strike action.

Dharna on 16.2.2013 at Chennai

The All India Insurance Employees' Association has given a call to all its units through out India for two day general strike to be held on February 20,21/2013. The UPA government at the center is neglecting all the genuine demands of the workers.  All the welfare schemes for the betterment of the common man and workers are being scuttled by the government, saying that there are no funds for it.  In the name of enforcing fiscal discipline the poor of the nation was held to ransom by the rulers.  But at the same time a staggering sum of 5.28 lakhs of crores of rupees was given as largees to big corp orates and rich in the name of revenue forgone in the last budget. The sky rocketing of prices of essential commodities is pushing many people to starve. The central government recently liberalized the oil pricing mechanism and increased the rates of diesel and gas. This kind of attacks were unleashed against people on the other hand doles were given to the corp orates at the expense of common masses. To condemn this attitude of the central government all the central trade unions are coming together for first time in the history for this two day strike. The common demand of the strike is 

1.take effective steps to reduce the prices 

2.Withdraw the Insurance Amendment bill 2008

3.Withdraw the new pension scheme

4.Implement the Labour and trade union laws and recognize AIIEA  in LIC.

5.Give one more of option for pension

and there are other common demands.

A massive Dharna is being planned at Chennai on 16 th feb 2013 Saturday from 2.00 pm to 5.00 pm

Com.A.Soundarrajan ,MLA, Floor leader CPI(M). is participating in the Dharna program me. Com.K.Swaminathan, General Secretary, SZIEF is also participating.