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.

            

 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.

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.

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.