UPA directly responsible for price rise: CPI-M

Condemning the government's refusal to reconsider the decision to increase fuel prices, the Communist Party of India-Marxist (CPI-M) Sunday charged the Congress-led government with being "directlyresponsible" for the rise in food prices.

The CPI-M also slammed the government for not reconsidering the steps being taken to deregulate petrol and diesel prices, saying "the the deregulation of prices are meant to help the private oil companiesand put the people at the mercy of a market-controlled by the multinational oil companies and the domestic corporates".

"By these steps, the Congress-led government isdirectly responsible for the spiralling price rise of food items and essential commodities," the CPI-M politburo said after its two-day meeting here.

Appealing to the people to join the all India shutdown Monday, the party said: "This powerful all India protest action should serve as a warning to the government not to heap burdens on the people and to withdraw theprice hike measures."

Scrap fuel price deregulation, demands CPI-M

The Communist Party of India-Marxist (CPI-M) Monday asked the central government to scrap deregulation in petrol pricing, after public sector oil companies increased prices twice in the past three weeks.

"By deregulating petrol pricing, the government has opened the way for successive hikes in prices," the CPI-M politburo said.

"The public sector oil companies have increased the price of petrol by 70 to 72 paise per litre. This follows an increase of 27 paise per litre in September. The price of petrol has already been increased by Re.1 per litre in the space of three weeks," the politburo said in a statement here.

The CPI-M said the rise in petrol prices will further add to inflation.

"The people who are suffering from continuous food inflation will be more burdened. There is no transparency in the decision making," it added.

Witholding information from insurer may result in claim rejection

 Insurance is a unique product. It is intangible and does not offer any immediate gratification. It is sold on the basis of promises made by insurers for events that may occur in the future and the policy document is a contract between the insurance company and the insured which provide for payment in case certain conditions are fulfilled.

The simplest of these conditions is completion of policy tenure. Other ‘conditions’ depend on a set of information provided by the insured and insurers generally take them on face value during the sale. But wrong information or truth withheld by consumers may make the contract void — making the consumer lose the benefits of that policy. Therefore, a great deal of the onus lies on the policyholder to ensure a hassle free on-time claim settlement. If the policyholder has been honest and true to the insurance company, he/she will get the benefits when needed. Otherwise, whatever may be the case, it’s the policyholder who loses on the benefits.

Therefore, first and foremost it is prudent to buy right and be aware of what one is buying. As a customer, one must be clear about the policy details, its features and benefits before one actually decides to buy the policy. A diligently adhered to check list minimises the risk of claim rejection.

As a customer one should never ever sign on a blank proposal form and leave the filling up to the agent. Such a practice leaves room for incorrect and incomplete information going to the insurance company. Fill the form yourself, if required with the agent’s help. Keep a photo copy of the form after having filled it. Most of the companies provide the scanned copy of proposal form as part of policy pack.

Also make sure you disclose all medical facts in the proposal form, as well as correct occupation and income. Correct date of birth along with valid age-proof is necessary for incorrect date of birth may lead to loss of full or partial claim benefits.

Insurance is the business of covering the probability of an individual getting sick or dying. In insurance lingo this probability is referred to as risk —higher the risk higher the premium. A person with high risk paying low premium by withholding critical information is like traveling with a short journey ticket, which is liable for penalty.

Nevertheless, it is also the duty of the agent to facilitate the policy holder’s family in submission of claim documents, filling up of forms. That is the time when the claimant/nominee need agent’s and insurers help the most. Life insurance above all is a contract of trust where policyholder should facilitate decision making by providing all the relevant information (medical and financial).

Always declare nominations at the proposal stage and keep the company informed at all times regarding any change in nomination as and when it happens. This helps in faster settlement of claims.

Pay premiums through account payee cheques instead of cash and insist for acknowledgment receipt from agents. If you are paying cash, preferably pay it at the life insurer’s office.

On receipt of the policy document, please read all the details and compare it with the proposal form to make sure that all the facts are in order. If not, you may get back to the insurer informing them about the differences. Regulations provide 15 days freelook period from the date of receipt of policy pack.

One should also keep in mind a few do’s and don'ts during the claims stage for speedy and smooth settlement. Submit all the required claim documents together. Details of documents required for claims settlement as well as the claims forms are available with the policy pack, with agent advisor, life insurer’s offices and on almost all life insurers’ websites.

Submit your documents as soon as possible because delay in submission may lead to delay in evaluation.

Above all, pay your premiums on time for a lapsed policy does not provide any claim benefits.

இன்னும் என்னவெல்லாம் முடியுமோ
அத்தனை கொடுமைகளையும்
செய்து முடியுங்கள்---ஆனால்..
.
உங்கள் அராஜகம் என்னை
அச்சுறுத்திவிடாது .

நான் ஒரு போதும் சோர்ந்து விழப்போவதில்லை

என் இறுகி மூடிய கைகளுக்குள்
ஒரு விதை ...ஒரு சின்னஞ்சிறு உயிர் வித்து

அதை நான் பத்திரமாகக் காத்து வைத்துள்ளேன் .

அதை எம் மண்ணில் மீண்டும் விதைப்பேன்

அதுவே என் நம்பிக்கை 

Braking point: Motor insurance claims drive losses of PSU insurers

New Delhi: Public sector Oriental Insurance Company expects its balance sheet to show a huge jump in underwriting losses in its forthcoming results, due to an over 200% rise in motor insurance claims. Responding to the crisis-like situation, the insurance regulator is expected to drastically revise the premium for the compulsory segment of motor insurance, also known as third-party cover, this month.

The situation has been brought on as under the Motor Vehicles Act, owners of all commercial and passenger vehicles have to get themselves insured against claims for causing injury or damage to others. Own-damage claims are optional under insurance laws. Because third-party cover is a loss-making portfolio, private sector insurance companies avoid taking on premium for only such cover, but a large percentage of old private and commercial vehicles want only this insurance.Oriental and the other three public sector companies have to compulsorily take on such premium. As a result of the huge concentration of third-party cover in their motor insurance portfolio, the companies are bleeding.

For 2008-09, the incurred claims ratio for Oriental was 237.76% for trucks and others. This means that of every Rs 100 the company earned, it paid out Rs 237 towards the third-party claim.

It has to dip into other portfolios to make good the loss. Obviously, the position is unsustainable.

The ratio was 232% for the entire public sector group, whereas it was 72% for the private sector companies. Once the Insurance Regulatory and Development Authority of India (Irda) revises the premium, there will be a sharp rise in third-party motor insurance premium. If the Irda draft guidelines on motor insurance premium rates for third-party liability cover are accepted, insurance premiums on trucks and buses would go up by 80% and for cars and two-wheelers by 10%. Data from Irda's Insurance Information Bureau show that that losses of both public and private sector insurers on their motor third-party insurance portfolio for commercial vehicles are going up consistently. In fact, Irda chief J Harinarayan said at a recent Ficci conference in the capital that general insurance companies have reported a combined loss of about R3,500 crore in the last fiscal on account of motor insurance claims.

He said that a final decision to increase the rates will be taken any time soon. “The liabilities in third-party have been immense and the rates for motor third party insurance must go up substantially. In view of the new liabilities, there must be nothing less than a 100% increase in rates,” says RK Kaul, chairman and managing director, Oriental Insurance. He adds that the Irda exposure draft that has proposed to increase the rates will ease the situation to some extent, but underlined that it was not enough. The Irda exposure draft is currently in the public domain and the authority will decide on the rates soon. While regulations on premiums in the non-life sector were withdrawn in 2007, third-party motor insurance continues to be regulated under the provisions of the Indian Motor Tariff Act.

The increase in rates has been on the cards for some time because of rising claims arising out of road accidents. Kaul explains that third-party motor insurance claims takes years years to mature, sometimes even eight years. “There is no time limit for filing the case as one can file it even five to six years after the accident, and once the case is filed, then it has its own procedures. In fact, motor third-party has always been bleeding the insurance companies portfolio as rates were always less than what they should have been.” To ensure that third-party motor insurance is not disproportionately loaded only a to certain classes of insurers, Irda constituted a motor pool five years ago to share the losses, which is currently running at a deficit.

Commercial vehicle owners have objected to the proposed steep hike in the third-party motor insurance premium and are advocating out-of-court settlements with accident victims.

Life insurers not in any rush for IPOs

New Delhi: It will be at least a year or two before life insurers plan to tap the primary market. They would rather work towards improving valuations since dramatic regulatory changes in the last one year have significantly hit their bottomline.

The regulatory changes have resulted in sharply lower business margins for unit-linked insurance plans and forced insurers to cut commission payouts. This has impacted the product and distribution strategy of life insurers and adversely affected their profitability forcing them to pare their operating expenses.

Amitabh Chaudhry, MD & CEO, HDFC Life says, “We are not in a hurry to go for an IPO. Our shareholders are very clear that we would go for it only at the right time which implies the right valuation that can be sustained based on our business performance.”

Last year, HDFC Standard Life and Reliance Life had evinced interest in raising funds through IPOs as and when the regulator finalised the guidelines for public issues.

The IRDA chairman J Hari Narayan had on Monday said these guidelines would be issued by April end. The life insurance industry has been saddled with high operating losses. According to a Boston Consulting Group report, the cumulative losses for private life insurers are in excess of Rs 16,000 crore in the past one decade with almost 75-80 per cent capital being used for funding operating losses rather than solvency requirement.

Rajesh Sud, CEO & MD, Max New York Life Insurance says, “The life insurance industry is currently going through the process of adapting their business model to suit the new environment created mainly due to change in regulations. Many private life insurance companies that started operations around a decade back are turning profitable. This is a time to consolidate to ensure a sustainable profitable growth. FDI is of critical importance to the sector at this juncture.”

There are 22 private life insurers in India besides state-owned LIC. The insurance regulator is likely to allow only those insurers in operation for at least 10 years with a track record of three successive years of profit to go public. Of the 22 insurers, 10 which have foreign joint venture partners, complete a decade of operation this year.

While ICICI Prudential Life, Kotak Mahindra Life, SBI Life, Met Life, Bajaj Allianz Life, Sahara India Life and Aegon Religare Life have reported profits, just five of them complete a decade of operations in India.

Industry sources said instead of IPOs, life insurers would prefer diluting their stake in favour of their foreign joint venture partners, if the FDI limit is hiked to 49 per cent from current 26 per cent.

G Murlidhar, COO, Kotak Mahindra Old Mutual Life says, “A rather tepid two years on account of global slowdown and regulatory changes in the sector has seen companies focusing on rationalisation and consolidation rather than growth. It will take at least a year for the situation to stabilise and for growth to return to the previous heady levels.”

With large investors like Warren Buffett having expressed interest in buying stake in one of the insurance companies once the FDI in insurance is hiked to 49 per cent, it is more likely that life insurers would explore the FDI route to raise capital rather than going public.

India to be among top 3 life insurance mkts

Mumbai: India's insurance sector, which is witnessing a rapid growth, is likely to touch about USD 400 billion in premium income by 2020, making the country one of the top three life insurance and top 15 non life insurance markets by 2020, according to a report.

"The insurance industry will continue to outpace the rapid economic growth to reach USD 350?400 billion in premium income by 2020 (approximately Rs 17-22 lakh crore), making India among the top three life insurance markets and top 15 non?life insurance markets by 2020," a report by Federation of Indian Chamber of Commerce and Industry (FICCI) and the Boston Consulting Group (BCG) has said.

The total penetration of insurance (premium as percentage of GDP) has increased to 5.2 per cent in 2011 from 2.3 per cent in 2001, said the report titled 'India Insurance ? Turning 10, Going on 20'.