LIC gets its first woman MD - Usha Sangwan appointed MD

Life Insurance Corporation of India (LIC) on Friday got its first female managing director (MD) and another new MD.

The government has appointed Usha Sangwan, executive director (corporate communication) at LIC and V K Sharma, MD and chief executive officer of LIC Housing Finance, as the two new MDs. With these two appointments, LIC is set to function at its full strength of four MDs after almost two years. These would be S B Mainak, Sushobhan Sarkar, Sangwan and Sharma. According to finance ministry sources, the two new MDs have been appointed till they retire from the corporation. According to the norms, LIC can have four MDs, and a chairman, as part of its top management. After former managing director T S Vijayan retired in November 2012, there were only two MDs — Sarkar and Thomas Mathew T.

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Mandatory training of 50 hours for agents puts pressure on insurers

Insurance agents, who are required to undergo mandatory trainingof 50 hours by an insurance company may not have any qualms attached to this process. However, insurance companies, who pay for this training process, are of the view that while there is an expenditure on these individuals, high attrition has made the process futile. "It is essential that agents are made to undergo practical training in life and general insurance industry, so that they are equipped to deal with the new trends in the insurance sector. However, while we have incurred additional expenses in training them, the agent, especially the younger ones, quit the industry in 2-3 years," said an insurance executive in-charge of personnel development. To bring out a solution to this, some insurers have circulated an internal note, wherein there is a proposal to approach the regulator to reduce the training hours. A senior life insurance company executive said that this could reduce costs.

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LIC hires 60,000 agents in mass recruitment drive

Life Insurance Corporation of India (LIC), the country’s largest insurer, has issued licences to about 60,000 new agents. The insurer plans to hire about 2,00,000 agents this financial year. R R Dash, executive director, LIC, said the insurer’s recruitment drivehad seen good response. To encourage people to join LIC as agents, the company has also held marketing initiatives in railway stations here.

In 2012-13, about 100,000 agents had quit the company. However LIC Chairman S K Roy had told Business Standard this was a universal phenomena; it wasn’t unique to LIC. “But we have good systems and processes in place. This year, we are looking at leveraging information technology (IT) to arrest attrition. IT has huge potential in making this work easier, since our team size is 1.2 million. We will put solutions in place in about a quarter,” he had said. To ensure there are more agents in the life insurance industry, the Insurance Regulatory and Development Authority (Irda) has relaxed the pass percentage in the agents’ pre-recruitment examination from 50 per cent to 35 per cent.

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Life insurers rush for product approvals

With the deadline for new product bouquets merely 15 days away, life insurance companies are leaving no stone unturned in ensuring their products are out in the market on time. In February this year, the Insurance Regulatory and Development Authority (Irda) had brought out traditional product guidelines that mandated life insurers to be complaint with the new norms by October 1. Their existing products are being re-filed with the regulator.

Rajesh Relan, managing director and country manager, PNB MetLife India, said after re-filing, there were multiple rounds of communications and clarifications between the company and the regulator. He added after securing an approval, companies would have to train their sales teams and start marketing-related activities.

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Chidambaram calls for compulsory digitisation of insurance policies

Digitisation of insurance policies should be made mandatory, Union Minister for Finance P. Chidambaram has said. Speaking after formally launching the insurance repository system of Insurance Regulatory and Development Authority (IRDA) here on Monday, Chidambaram asked the regulator to have a time frame for mandatory digitisation. As of now, it is not mandatory.

“This should have been implemented long back,” he said adding that digitisation would help even in natural calamities as people tend to lose documents along with property. Referring to the recent floods in Uttarakhand which claimed many lives, the Finance Minister asked Life Insurance Corporation and the public sector general insurance companies to open camp offices in Uttarakhand to facilitate speedy settlement of claims.

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'Banks can only sell standard insurance products through branch'

Banks will be allowed to sell only standard or vanilla insurance products through their branches following the relaxation of brokerage norms by the sectoral regulator Irda, said a financeministry official. The move is aimed at ensuring that lenders do not sell customised insurance products where risk assessment is more complex. It will also address various concerns of the Reserve Bank, including those pertaining to conflict of interest. RBI does not want banks to undertake new risk in the form of insurance broker.

 

"Products with same features will not only prevent mis- selling but also ensure that customers can chose a product based on the performance and efficiency of the insurer," the official said. Irda will ensure that all products sold through banks are standardised in terms of features and commission structure, the official added. A broking licence will allow a bank to sell products of multiple insurance firms, compared with the current bancassurance model that allows lenders to sell products of just one life and non-life insurance company.

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Sponsorship, hefty insurance cover mark big-bucks Ganesh Chaturthi

The city is soaked in festive spirit as Ganesh Chaturthi begins. Towering idols and eco-friendly ones alike dot every nook and cranny.

The economic slowdown has not taken the sheen off Maharashtra’s most popular deity. At 12 feet, Mumbai’s iconic Lalbaugcha Raja has been receiving a steady flow of sponsorships from corporates and local advertisers.

“This year, the sponsorships are expected to cross Rs 4 crore,” said Ashok Pawar, President of Lalbaugcha Raja Sarvajanik Ganeshotsav Mandal. The total donations at the end of the 10-day festivities easily cross Rs 50 crore each year.

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Mumbai's Ganesh Mandals spruce up festivities by beefing up insurance

Ganpati mandals in Mumbai have ensured that no untoward incident dampens the spirit of the 10-day festivities that begin from Monday. In an attempt to welcome the elephant god to a safe environment, the mandal committees have beefed up theirinsurance covers.

Take the most popular Ganesh mandal. Lalbaugcha Raja,   situated in Lalbaug area of Mumbai, has been insured with an insurance cover of Rs 51 crore, up from Rs 45 crore taken last year. The  policy,   taken from New India Assurance,  includes   Rs 3.5 crore cover for pandal, settings and electricals, Rs 10 crore for third party   risks   (prasad or edible offerings)   as precaution against food poisoning, accident cover of Rs 30 crore covering both volunteers   and    devotees    and Rs 7.5 crore cover to protect the idol’s jewellery.

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Banks may not rush to become insurance brokers

While the Insurance Regulatory and Development Authority (IRDA) has released the guidelines for banks to sell products of multiple insurance companies, most of them are unlikely to rush to seek broking licence.

According to a senior IRDA official, the Reserve Bank of India is not keen on banks becoming brokers as many of them have promoted insurance companies and this could lead to a conflict of interest.

Also, as brokers, banks will have a fiduciary responsibility to customers and can be made accountable for mis-selling. Many big lenders such as ICICI Bank, HDFC Bank, SBI, IDBI Bank, Bank of Baroda, Canara Bank, Bank of India, and Punjab National Bank have promoted insurance companies.

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Banks can be insurance brokers subject to RBI approval: Irda

The Insurance Regulatory and Development Authority (Irda) said on Thursday banks should obtain prior approval of the Reserve Bank of India (RBI) before applying for a licence to act as an insurance broker.

In its notification on licensing banks as insurance brokers, Irda said banks should apply under the direct broker category. The licence, once granted, will be valid for three years. There is no requirement of capital for entities licensed under this particular regulation. To qualify for the licence, each bank will have to have the principal officer - an officer of general manager or equivalent category, who is appointed exclusively to carry out functions of an insurance broker.

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One more .....Aviva may exit Indian insurance market .........???

UK-based financial services major Aviva Plc is reportedly planning to exit from its over 10-year old Indian joint venture life insurance company with diversified FMCG player Dabur. Aviva is reportedly in the process of hiring corporate advisors to find buyers for its 26 per cent stake in the Indian business. When contacted for comments, Aviva India in an e-mail said: “We don’t comment on market speculations or rumours as a policy.”

E-mails sent to Aviva Plc in this regard did not elicit response. Various options are being considered for the exit including the sale of its stake to Dabur Group if Aviva Plc fails to find a foreign insurer to buy it. Started in 2002, the life insurance firm has a paid up capital of Rs 2,004 crore.

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Paperless insurance coming soon for all

Insurance companies are preparing to issue e-insurance policies in the near future, in  a move   towards a more paper-free environment.

The Insurance Regulatory and Development Authority has recently said insurers can enter into agreements with one or more repositories. An insurance repository would provide a facility to keep insurance policies in electronic form and to undertake changes or revisions speedily. Policyholders could opt to digitise their policy or have it in the existing format. Irda has granted in-principle approval to five entities for entering the insurance repository business. These five have yet to launch operations. A senior official with one of these said, “We would launch operations within the next few months.”

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Public sector general insurers to hire over 1,400 administrative officers

The four public sector general insurance companies are recruiting 1,434 administrative officers between them. National Insurance Co is recruiting 423, New India Assurance is recruiting 494, United Insurance - 294 and Oriental Insurance is recruiting 223 officers.

Total emoluments for the post will be above Rs 34,000 in Metros. Cost-to-company (CTC) works out to Rs 5.10 lakh per annum.

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Private sector insurers not keen on opening branches abroad

Private insurers seem to be in no hurry to open branches abroad. The insurance regulator has so far not received any application from them seeking approval for opening branches in foreign locations.

“Though the regulator had come up with guidelines on the requests from some insurers, there have been no applications for opening branches abroad from private insurers,” R. K. Nair, Member, Insurance Regulatory and Development Authority (IRDA), told Business Line. Public sector braches are now operating some branches overseas.

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Maternity cover to get costlier

Maternity covers might see an increase in premium, with theInsurance Regulatory and Development Authority (Irda) advising companies to design comprehensive covers for this purpose. Insurers said if the mandates by the regulator are followed and products launched under those norms, there could a rise in the cost of such covers by 20-25 per cent.

In clarifications issued recently, Irda had said maternity expenses shall include medical treatment expenses traceable to childbirth (including complicated deliveries and caesarean sections) and expenses towards lawful medical termination of pregnancy during the policy period. Pre-natal and post-natal medical expenses for delivery or termination will generally be excluded from maternity expenses, unless insurers make special provisions for it.

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Single premium products to see tougher times ahead

Single premium products are expected to see a continuing slide in new business premium collection, with insurance customers moving to bank-related investments and low incentives for distributors to sell the product.

"We have seen a drop in premium collection for these products, owing to low customer appetite, and we expect it to continue," said the chief executive of a private life insurance firm. The executive added that with attractive rates, bank FDs were felt to be more attractive by customer, and hence they were switching to those products.

Single premiums products are those, where the premium is paid as a lump-sum amount. Non-single premium product are those, where premium is paid at regular intervals. Life insurers, are of the view that, the single premium segment is down, due to the added fact that in the linked-premium segment, the slowdown in market performance has led to the slump in sales.

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Allow banks to sell policies of 5 cos: Life Insurance Council

 Life Insurance Council ( LIC), an industry association, has suggested that a bank should be allowed to sell products of five different insurers. 

At present a bank is allowed to sell products of only one life and one non-life insurance companies as an agent. 

The council has recommended that a bank can tie up with at least five insurers with not more than 25 per cent share per insurer. 

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IRDA slaps Rs 20 lakh fine on Aviva Life, Rs 5 lakh on Indusind Bank

The Insurance Regulatory and Development Authority (IRDA) has slapped a Rs 20-lakh penalty on Aviva Life Insurance Co India Ltd.

The fine was imposed for payment of higher commission than what was permitted by the regulations in force, the regulator said in an order issued on Friday.

The company had made higher commissions to its corporate agents, Indusind Bank and Punjab & Sind Bank and Anngram Stock Broking Ltd, the order said.

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Insurance sector to grow less than 5% in FY14: CII survey

The Indian insurance sector is projected to grow at less than five per cent this financial year, according to a survey by the Confederation of Indian Industry (CII). Non-life insurers were more optimistic about growth, compared with life insurers, said the survey.

Nearly 60 per cent of non-life insurance companies projected an average growth of more than 10 per cent, whereas 50 per cent of surveyed life insurers expected to see negative growth in the current financial year. "While the Indian insurance industry is acknowledged globally to have matured tremendously since the opening of the sector in 2001, a facilitative and enabling regulatory and policy environment is critical to ensure insurance companies in India enter the next stage of growth and evolution on the foundation of greater insurance density and penetration," saidChandrajit Banerjee, director-general, CII.

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LIC set to open 300 mini-offices by June

Life Insurance Corporation of India (LIC) is set to open 300 officesby the end of this month. At an event next week, Finance MinisterP Chidambaram would inaugurate 300 mini LIC offices at one go. These offices, to be spread across the country, would have an LIC employee each, as well as agents empowered to collect premiums.

These offices would not only collect premium and issue policies, but also assist customers in renewals. Thomas Mathew T, current-in-charge chairman, said, “In India, there are 3,867 locations with populations of 10,000 or more. We are present in 2,167 locations. We would open 1,700 additional offices by the end of December.”

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