Search This Blog

Wednesday, 30 July 2014

Children plans come of age

With equity markets posting a double digit return of 16.3% in the last four months (April-July) and 18% last fiscal, it's good days again for ULIPs (unit linked insurance policies).

Insurers are not content offering plain vanilla ULIP plans. The latest variant that agents are wooing young parents with is a child linked ULIP plan.

While traditional child plans are normally of 15-year duration with ULIPs having a lock-in period for five years, insurers say those with a higher risk appetite can stay invested for three terms in ULIPs. Such plans provide insurance cover and participation in equity markets. In case of any eventuality, the sum assured is paid to the nominee, the future premium is waived off and the maturity value would be paid at the time of maturity.

While premium payments in traditional child plans are normally invested in government securities with the aim of a corpus creation and subsequent guarantee payout, in case of premium investments in child ULIPs, the policy holder can opt for a SIP (systematic investment plan) or go in for a dynamic fund allocation. "Regular premiums paid over a long term means investing at varied market cycles, averages the risk of the policyholder," V Viswanand, senior director and COO, Max Life Insurance said. Also, such policies fare well against other competing products, say industry observers. "Interest rates on fixed deposits have been an annual average of 7.3% in the last 13 years while traditional child plans give a 6% return," %S Sridharan of FundsIndia said.

Insurers are wooing customers with other attractions as well. For instance, Max Life, which launched Shiksha Plus Super on the ULIP platform, provides for school fee support. "In addition to the lumpsum death benefit, the beneficiary is entitled to receive 10% of sum assured every year on death of the parent (life insured), subject to a maximum of 10 and a minimum of three such instalments, to provide for the yearly education expenses of the child," Viswanand said.

PNB MetLife also has aggressive plans for this category. "Currently child-linked plans constitute approximately 3-4% of our product portfolio, which is in line with the industry average. With a stable government and positive outlook from the market, we have seen a renewed interest in the unit linked category, which may result in higher contribution to the overall product portfolio," Tarun Chugh, MD & CEO, PNB MetLife said.

Other life insurers like HDFC Life and ICICI Prudential too have child plans with a ULIP feature. And ULIPs has been an important growth driver for these two companies in the recent past.

Monday, 28 July 2014

Move to hike insurance FDI brings JVs' stake pricing back in focus

The government's decision to increase foreign direct investment cap in the insurance sector to 49% could reopen the prickly issue of pricing the additional 23% stake sale to the foreign partner. One of the larger companies where the issue is likely to arise is Bajaj Allianz Life and General Insurance, where the Indian promoter has said that pricing would happen at market value despite an earlier agreement for a stake sale at a formula that offered a fixed return.

Most insurance joint ventures have given their foreign partner the right of first refusal to buy additional stake up to 49%. This includes large insurers like SBI Life and HDFC Life. HDFC chairman Deepak Parekh said in the recent AGM that Standard Life has the first right to buy stake for an additional 23% at market price if limits are raised.

Stake sales at market price or fair value are not an issue. However, several companies had entered into an agreement where the equity stake would be transferred at a price based on a pre-determined rate of return. Such agreements served two purposes: they ensured that the Indian partner was not exposed to risk and second, it allowed the foreign buyer to increase stake with a nominal amount even though the value of the business would have risen considerably.

With a call option in place, most of the funding for the expansion of business came from the foreign partner by buying equity shares at a huge premium. For instance, the shareholder funds of Bajaj Allianz Life Insurance continue to be Rs 151 crore while reserves and surplus amounted to Rs 4,811 crore. In the case of Bajaj Allianz General Insurance, the share capital was around Rs 110 crore while reserves and surplus amount to Rs 1,245 crore.

In 2001, when Bajaj Auto entered into two joint ventures with Allianz, the bike maker gave the German insurer an option to hike its stake up to 76% in the life company and 50% in the non-life venture. Bajaj Auto had also agreed to a deal where the German Insurer could hike stake in the life company and the non-life company up to 74% and 26%, respectively, for a fixed compounded return of 16% per annum if the increase in stake happened before 2016.

Earlier speaking to TOI, Sanjiv Bajaj, MD, Bajaj Finance, had said that the %government's decision to hike foreign direct investment in the insurance sector was a positive for Bajaj Finserv shareholders as the companies did not need any more capital and Bajaj Finserv would book profit on selling shares to Allianz at market prices.

Bajaj Auto had disclosed that it had received a 'premium' from Allianz with partnering Bajaj Auto. Subsequently, when the demerger of the finance business happened from Bajaj Auto, it came to light that there was also an agreement to transfer stake at a price based on a fixed return formula.

Saturday, 26 July 2014

Irda sees more insurance firms listing on bourses

The Insurance Regulatory and Development Authority (Irda) chairman T S Vijayan expects many insurance companies coming forward to list their shares on stock exchanges that the foreign direct investment (FDI) cap is hiked to 49% from 26%.

"This is good for the industry as more players can be monitored for their performance."

"More regional corporate distributors should crop up so that the regional demand for insurance can be met. There is a huge latent demand for insurance in the semi-urban and rural areas, and this potential needs to be tapped," Vijayan said.

Speaking at the 96th foundation day function of New India Assurance, Vijayan said it is important for insurance companies to make transparent products that will explain the returns to the investors.
He, however, ruled out any hike in the product pricing.

"Rather, the companies should be able to manage their expenses in distribution to keep the products cost-effective," said the chairman.

The premium-to-GDP ratio in India is just 4%. While the non-life segment of the business is growing, the growth for the life insurance companies is stagnant.

Many companies in India are facing high attrition among agents, with the rate being as high as 35%. And it is also unfair that 2% of insurance agents in the country control 30% of the commissions.

"Product innovation and transparent products are the need of the hour. There is a huge potential for companies in micro insurance agriculture insurance, disaster insurance and insurance for migrant labourers," he said.

Portability was introduced in the sector, but the Irda chief said even this has not taken off well and it will improve only when companies improve their transparency.

The chairman said the mandate of the regulator is not just in regulation but also in product innovation. New India Assurance, he said, has become a worldwide company with domestic premium collections touching Rs 14,300 crore and the overseas premiums touching Rs 2,700 crore in 2013-14.

G Srinivasan, chairman and managing director, New India Assurance Co, said, "We come long way from the time we were incorporated in1919 as a private insurance company by group of businessmen led by Tata group. Today on the 96th foundation day, we have an asset base of Rs 53,000 crore and about 70% of the corporate risk is being insured by us."

Thursday, 24 July 2014

Cabinet approves Insurance, SEBI Amendment Bills

The Union Cabinet has okayed introduction of the Bill for raising FDI in insurance and empowering SEBI to act against illegal deposit and ponzi schemes.

The Government will introduce both these Bills during the ongoing session of Parliament. A senior Cabinet Minister told Business Line that there will not be any rider in the Insurance Bill for foreign investor who can now own up to 49 per cent from the current provison of 26 per cent.

The Cabinet has also okayed the Securities Laws (Amendment) Bill. This will replace the ordinance promulgated thrice. This will empower the Securities and Exchange Board of India to act against ponzi schemes and making mandatory registration for money pooling scheme above Rs 100 crore.

Tuesday, 22 July 2014

PM Modi set to revamp financial inclusion; new scheme to be unveiled on August 15

Prime Minister Narendra Modi is set to give a big boost to the ongoing financial inclusion drive by unveiling a comprehensive programme at the Red Fort in his address to the nation on the Independence Day.

The proposed comprehensive financial inclusion programme envisaging insurance and pension cover, apart from a default cover for lenders, is likely to envisage opening 15 crore more bank accounts, 12 crore of which will be in rural areas over next four years, according to a note sent to the Indian Banks Association (IBA) by Financial Services Secretary G S Sandhu.

According to the note, Mr Modi’s new comprehensive financial inclusion programme has three major shifts from the one pursued by the previous government.

First, the earlier efforts at financial inclusion had villages as the unit for coverage while the current plan focuses on coverage of households.

Secondly, only rural areas have been the focus so far while both rural and urban areas have been included now, says the ministry note.

Thirdly, the current plan is proposed to be implemented as a ‘mission mode’ project. It envisages a comprehensive coverage of all excluded households by a six-pillar approach in two phases, according to the note.

The first phase of the programme, which begins from August 15 this year and ends on August 14, 2015, will provide basic banking accounts with overdraft facility of Rs. 5,000 and RuPay debit card with inbuilt accident insurance cover of Rs. 1 lakh and creation of credit guarantee fund for coverage of defaults in overdraft accounts, according to the ministry.

The second phase, which will begin on August 13, 2015 and conclude by August 14, 2018, will cover micro-insurance and unorganised sector pension schemes like Swavlamban.

When contacted, IBA said already state-owned banks, insurers and regulators are working overtime to ensure a smooth kick-start.

“We are currently busy chalking out the modalities of implementation of the project, which will be implemented in the entire country after it is declared by the Prime Minister on August 15,” IBA chairman K R Kamath, who is also the chairman of Punjab National Bank, told PTI.

It is a good scheme as it envisages going beyond the geographical boundaries and promises of connecting each and every household, he said, adding that more than being commercially viable, it is important to link every household with the banking system.

“Through this programme, we are looking at providing two savings bank account facility-one each for the husband and the wife-to all those households which not served by the banking system so far,” MR Kamath said.

“Of course, these basic banking accounts will come with some in-built overdraft facility and RuPay debit cards with an inbuilt accident cover of Rs. 1 lakh. We are awaiting the final announcement of the scheme by the Prime Minister.”

Inclusive pension is also one of the pillars of the proposed comprehensive financial inclusion programme.

“Pension under ‘the mission mode’ will lay emphasis on this facility for the lower income segment and the unorganized workers,” said R V Verma, acting chairman of the Pension Fund Regulatory and Development Authority (PFRDA).

“We will seek to achieve and expand the scope of the National Pension Scheme (NPS) to serve the disadvantaged sections of the population through active involvement and participation of all categories of intermediary institutions like banks, NBFCs, MFIs, NGOs, corporates and annuity service providers,” Mr Verma added.

Though micro-insurance will come in the second phase of the programme, insurers have already started working on it.

“While the already existing 4,000 micro offices of the four PSU general insurers would be strengthened, over 2 lakh existing business correspondents will be asked to sell micro insurance products to ensure the last mile connectivity,” New India Assurance chairman and managing director G Srinivasan said.

“Though micro-insurance will come in the second phase only, we have already started working on it,” he added.

The premium for the low-cost insurance products, which is to be paid by the beneficiaries or from subsidy under the Rashtriya Swasthya Bima Yojana scheme, will range between Rs. 100 and Rs. 300 per annum, New India Assurance general manager K Sanath Kumar said.

Nabard will provide the initial Rs. 1,000 crore to create a credit guarantee fund to cover possible defaults on overdraft accounts under the scheme, a Nabard official said.

Several rounds of meetings have already been held by the Department of Financial Services with all the stakeholders of the programme, including state-owned banks, insurance companies and pension regulator PFRDA.

The banking sector would be expanding itself to hire an additional 50,000 business correspondents (BCs), launch over 7,000 branches and more than 20,000 new ATMs in the first phase, Sandhu told the IBA, adding that around 50,000 BCs are likely to be appointed in rural areas for the programme alone.

Saturday, 19 July 2014

Airfares and insurance - after latest Malaysia Airlines tragedy.

The shooting down of Malaysia Airlines flight MH17 between Amsterdam and Kuala Lumpur on Thursday could affect the aviation industry adversely.

The Ukraine-Russia border region where the Boeing 777 went down falls under a busy flight path used by global airlines flying between Europe and Asia.

Route change

In the wake of the incident, Air India and several other global airlines have decided to avoid the region and changed their flight routes. Another Indian carrier, Jet Airways, also flies to Europe from India.

The change in route will not only make flights between Europe and Asia longer, it will also see costs going up as every additional minute spent in the air means more aviation fuel burnt.

With the price of aviation fuel being at an all-time high due to the crisis in Iraq, one of the largest producers of oil, the deviation from a well-laid-down flight path is likely to bruise the profitability of the global airline industry.

It could also lead to airfares moving northwards if airlines decide to pass on the higher cost to passengers.

Insurance hit

Then there is the issue of aircraft insurance — the premiums that global airlines will have to pay to insure their fleets are also likely to go up. This could be a major worry for Air India, which is in the market to re-insure its fleet.

At the moment insurance companies are hedging their bets on the impact of the crash although some feel that the premium payout is likely to go up not only for Air India but other airlines as well. This increase may also be passed on to flyers, leading to higher fares.

9/11 impact

Something similar had happened after the 9/11 terror attacks. The fall of the twin towers in faraway New York had an immediate financial impact on Airlines House, the headquarters of Indian Airlines.

The IA top brass had barely returned from London after successfully renegotiating a lower rate for the insurance premium when they were summoned back to London to renegotiate at a higher rate after the terror attack on the twin towers.

G Srinivasan, Chairman and Managing Director of The New India Assurance Co Ltd, felt that the Malaysian Airlines flight’s shooting down could lead to hardening of premium rates in the aviation insurance market.

“No hardening was noticed after the tragedy of Malaysian Airlines flight MH370. The insurance industry has had a good experience in the aviation market in recent years, but for the two recent incidents,” he said.

Thursday, 17 July 2014

Here's why your health insurance claim can be rejected

Unhealthy practice

In February last year, the Insurance Regulatory and Development Authority (Irda) said it was issuing a standard definition for 46 commonly used terms in health insurance, in respect of all policies issued by life and general insurers.

"Although health insurance is rapidly growing, access to it still remains limited and complaints, especially due to variable interpretations of key policy terms, are enormous," it explained. "All insurers shall adhere to the stipulated definitions, while defining these 46 core terms in all policies," it said.

However, policyholders' plights are far from over.

Take the case of Anand Kumar, whose wife had high fever for four days continuously. When it refused to subside, Kumar was advised a blood test and his wife showed symptoms of both malaria and typhoid.

The doctor advised admitting her to hospital, to control the fever at the earliest. The rest of the treatment could continue after she was discharged. Kumar agreed instantly.

Yet, when Kumar presented a claim against his health insurance policy, his insurer rejected it, saying its view was that hospitalisation wasn't required. The health insurance contract excluded 'medical expenses where inpatient care is not warranted'.

Who takes the call: Insurer or doctor?

While Kumar got his expenses reimbursed through his employer's group health policy, maybe a self-employed indvidual could not have done so. Yet, when a doctor suggests admission, almost no one will refuse to heed it.

The other clause most life and general insurers include, especially in critical illness plans, is 'failure to seek or follow medical advice'.

Deepak Yohannan of feels its difficult to say such clauses are unfair or open-ended. 'Because, taking from the clause, delay in taking medical help escalates the cost of treatment, which makes it expensive for the insurer for no reason from their side.'

Yet, how do you ensure that you seek medical advice at the right time?

While health insurance experts agree insurers should accept such claims as there should be no questions raised on a doctor's recommendation, insurers easily decide against it. Some blame it on high instances of cases where a patient is hospitalised only because he has a health cover.

But there is no standardisation on such a sub-clause. There is no such definition in Irda's Standardisation Guidelines and it leads to claim rejection.

Another exclusion for critical diseases reads 'loss caused directly or indirectly, wholly or partly by infections or any other kind of disease'. This is also there as part of many insurers' personal accident cover. Simply put, nothing is covered.

Open-ended definitions

Sometimes, even standardised definitions can be very open-ended and lead to claim rejection.

Says Yashish Dahiya of, 'One such example is the definition of pre-existing conditions. Irda defines or standardises a pre-existing condition as 'previous hospitalisation or medical treatment due to an injury or medical condition within the last 48 months of the policy being issued'. However, this definition is insurer-specific and insurers can categorise a disease as pre-existing even if it was preceding a period of 48 months.'

Another example is the definition of something as simple as 'injury'. This means 'accidental physical bodily harm, excluding illness or disease solely and directly caused by external, violent and visible and evident means, which is verified and certified by a medical practitioner'.

MS Kamath, a medical practitioner and general secretary of the Consumer Grievance Society of India, said by such definitions, even a simple sprain should be covered under health insurance. That is not the case.

Kamath adds that while policyholders are to be blamed for not reading the health cover contracts they sign on, there is a problem of terms such as stroke and paralysis being used very loosely. For instance, only two fingers could be paralysed but that is not the definition of paralysis for insurers.

Too convoluted to understand

A classic example is of room rent. Irda guidelines define it as 'the amount charged by a hospital for the deductibles in occupying of a bed and associated medical expenses.

'Deductible is a cost sharing requirement that provides that we will not be liable for the amount of covered medical expenses, as specifically mentioned in the policy schedule, which has to be borne by you (policyholder) for each and every claim during the policy period, before it becomes payable by us (insurer) under the policy.

'This is to clarify that a deductible does not reduce the sum insured.'

'Which policyholder can understand this on his own?' asks an expert. 'And, no insurer will explain it clearly. Because of confusion over room rent charges, many are paid lower claims.'

Critical illness is defined as 'symptom/s (and/or the treatment) of which were present in the insured person at any time before inception of this policy or on the date on which cover here under was granted to such insured person, or which manifests itself within a period of three calendar months from such date, whether or not the insured has knowledge that the symptoms or treatment were related to such critical illness'.

Again, something few can easily decipher.

Official gobbledgook

- 'Critical illness symptom/s (and/or the treatment) of which were present in the insured person at any time before inception of this policy or on the date on which cover here under was granted to such insured person, or which manifests itself within a period of three calendar months from such date, whether or not the insured or the insured person has knowledge that the symptoms or treatment were related to such critical illness'

- 'Room rent is the amount charged by a hospital for the deductibles occupying of a bed and associated medical expenses.

Deductible is a cost sharing requirement that provides that we will not be liable for the amount of covered medical expenses, as specifically mentioned in the policy schedule, which has to be borne by you (policyholder) for each and every claim during the policy period, before it becomes payable by us (insurer) under the policy.

This is to clarify that a deductible does not reduce the sum insured'

- Injury means 'accidental physical bodily harm excluding illness or disease solely and directly caused by external, violent and visible and evident means which is verified and certified by a Medical Practitioner'

Reasons for claims to be denied

- Failure to seek or follow medical advice

- Medical expenses where in-patient care is not warranted

- Loss caused directly or indirectly, wholly or partly by infections or any other kind of disease

- Any change of profession after inception of policy which results in the enhancement of our risk

Saturday, 12 July 2014

Budget 2014: Finance Minister's cover drive may fetch India $20bn in FDI

Liberalization of foreign direct investment (FDI) in insurance could result in inflows of over $20 billion over the next three to five years. Insurers also expect to gain from the increase in tax breaks under section 80C of the Income Tax Act to Rs 1.5 lakh and service tax relief for microinsurance schemes.

An increase in insurance sector FDI would automatically raise the ceiling for pension firms and insurance intermediaries. But insurers are looking for more clarity. First, they want to ensure that the government has indeed buried its earlier plans to allow higher FDI through non-voting shares.

They also want to know whether the approval will be on a case-to-case basis and whether it will be through the Foreign Investment Promotion Board (FIPB). "Until now all investments in the insurance sector were under the automatic route as the limit was specified by law, and licences were granted by the regulator," said Deepak Mittal, MD & CEO, Edelweiss Tokio Life Insurance.

In his Budget speech, finance minister Arun Jaitley said, "The insurance sector is investment-starved. Several segments of the sector need an expansion. The composite cap in the insurance sector is proposed to be increased up to 49 per cent from the current level of 26 per cent, with full Indian management and control, through the FIPB route."

Ashvin Parekh, managing partner, Ashvin Parekh Advisory , said, "I am very glad that the issue of nonvoting rights has been put to rest as the non-voting stake would have resulted in a much lower valuation."

He added that in most life insurance joint ventures, the agreement envisages stake transfer to the foreign partner at fair market value. "At fair market value, 23 per cent stake of all the companies in the insurance sector put together would be Rs 1.1-1.2 lakh crore," said Parekh.

Sunil Sharma, chief actuary, Kotak Life, said, "Increasing FDI would lead a 25-30 new insurers entering the market."

Thursday, 10 July 2014

Does gold make for a good insurance bet?

Is this is a ‘golden’ opportunity?
There is so much media glare on equities that investors have little opportunity to evaluate other options. The perceptive investor however, does not focusing on the media. He wants to know if there is any opportunity out there that he may be overlooking; perhaps an opportunity in gold? It is normal for investors to think a little contrarian at this stage. Everyone is talking of equities hence they are looking for something other than equities that has not quite shot up to the same extent. Enter gold.

Why gold?
It is important to first understand what gold brings to the portfolio. This will help us assess whether gold is a good investment in these times and if not now, then when does gold make for a lucrative investment?

Most investors think of gold as an investment, which it is of course, by virtue of the fact that investors are putting their money in gold. These investors think of gold as an investment / asset that will earn a return over the long term. In this sense, they think of gold like any other asset be it equities, property, fixed deposit and so on.

The more perceptible investors think of gold as insurance. They buy a little gold to insulate the portfolio against shocks – be it from politics or economic downturn or a global catastrophe like the 2008 global credit crisis.

Why does gold makes for a good insurance bet?
Gold is unlike other assets in two ways–there is limited supply, which means that you cannot increase gold supply like you can increase the supply of equity shares or bonds. So gold prices do not fluctuate in the same way as bond prices or share prices. The second way gold is different is that it is an international asset and available to the Indian investor at the same price as the US investor (ignoring local factors like import controls and the like). This makes gold a solid asset with a price that is usually a good indicator of the intrinsic worth of the asset and this price is the same across the world.

Since gold is so good, why would investors ever want to own another asset? They should simply buy gold since it is the only ‘true blue’ asset at a price that is more intrinsically true than other assets.

That would be true if gold was the only asset in the world. But it is not. There are other assets to choose from– equities, fixed income, property even cash or liquid funds. And there are occasions when each of these assets has outperformed gold. If investors were to remain glued to gold, they would have lost out on these opportunities. Ultimately, every asset goes through a boom/bust cycle. The idea is to enter the asset at a low and sell at a high.

Why not gold?
Because gold acts as insurance in the portfolio, it is usually sought after by nervous investors when other assets are not expected to do well. So when equities and fixed income are no longer attractive due to economic woes for instance, gold enters the limelight.

Ditto for currency. So long as the US dollar was under pressure due to quantitative easing (QE), investors flocked to gold. Now that the Federal Reserve has indicated that it will phase out QE, investor confidence in the US dollar is restored at the expense of gold.

Over January 2014 to June 2014 gold has barely risen by 9%, of this nearly 7% appreciation came in June 2014 alone. Compare this to the blistering growth in equities–Indian indices of all hues are at all-time highs. As global economies rebound, investors no longer take shelter in gold; they want to capture economic growth through equities. So long as global economies are recovering strongly from post-2008 levels, equities will be the flavor at the expense of gold. Subdued gold demand will reflect in depressed gold prices.

So should you invest in gold today?
Gold should be treated as insurance and not as an asset. Gold is an asset for hedge funds and astute fund managers, who study global trends and invest in gold on cues. Retail investors must buy gold as insurance to insulate their portfolios from shocks in the equity and debt markets.

Gold should be about 5%-10% of the portfolio. Your financial planner is best planned to define the precise allocation based on your risk appetite and investment objectives.

Monday, 7 July 2014

Health policy claim can't be rejected for delay in lodging

The stipulation to lodge a claim within 30 days of discharge is not mandatory but to facilitate expeditious settlement

Insurance companies take their own time to process claims, ignoring the time frame stipulated under the Protection of Policyholders Interest Regulations. But when there is a delay on the part of the insured in making the claim, the insurance company promptly rejects the claim for not having been lodged in time. This is unfair and detrimental to consumer interest.

Rita was insured with New India Assurance under its Mediclaim policy. The policy commenced on January 16, 1999, and was renewed without break. In the ninth year of the policy, Rita was hospitalised for vaginal hysterectomy from September 29, 2010, to October 2, 2010. The intimation about the hospitalisation was given to the insurance company on September 30, 2010. After discharge, Rita felt weak for some time. Later, on November 17, 2010 she lodged a claim for Rs 1.27 lakh incurred towards the surgery, hospitalisation and treatment. The claim was rejected on the sole ground that it had not been lodged within one month of discharge from the hospital but after a delay of 17 days.

Alleging the rejection of the claim was not justified and constituted a deficiency in service, Rita filed a complaint before the Additional Consumer Forum for Mumbai Suburban District against Health India TPA Services as well as New India Assurance.

The TPA did not care to appear, but the insurance company contested the complaint. It argued the terms of the insurance contract provided that a claim must be lodged within 30 days, and since Rita had not done so, she had forfeited her right to make a claim.

The Forum observed the delay of 17 days caused due to weakness and Rita's health condition could be condoned. The stipulation to lodge a claim within 30 days of discharge is not mandatory but to facilitate expeditious settlement. So this clause cannot be used against the insured to repudiate the claim. The Forum relied on the decisions of the Maharashtra State Commission in the case of New India Assurance versus Nanasaheb Jadhav, and also of the National Commission in the case of State of Maharashtra versus ICICI Lombard, where it was observed that the claim should not be rejected on the basis of such technicalities.

The Forum concluded the claim was payable. The TPA and the insurance company were jointly and severally directed to pay Rita Rs 1.27 lakh along with 10 per cent interest from the date of filing the complaint. Additionally Rs 10,000 was awarded towards compensation for mental harassment and Rs 5,000 as costs.

Rita had also sought restoration of the no-claim bonus. The Forum refused to grant this relief, as it had become time-barred since the bonus had been withdrawn in 2007 while the complaint was filed in 2011.

It is to be noted that a Mediclaim policy provides for reimbursement of pre-hospitalisation, hospitalisation and post-hospitalisation expenses upto 60 days. So, if a claim is to be lodged within 30 days of discharge, the entire claim cannot be lodged at one ago, and the insured would have to lodge a second claim for the remaining 30 days post-hospitalisation treatment. This amount is comparatively less and there are several instances where this amount is not paid, yet the insured does not consider it worth fighting for, as the amount is comparatively negligible. To simplify matters, the insurance company must encourage the lodging of only one claim for the entire treatment.

Friday, 4 July 2014

Tata AIA Life wins Lokmat BFSI award for Best Private Life Insurance Company in India

Tata AIA Life Insurance Company (Tata AIA Life) has won the Best Life Insurance Company (Private Sector) award at the inaugural Lokmat Banking, Financial Services & Insurance (BFSI) award ceremony in Mumbai.

The Lokmat BFSI Awards have been instituted by the Lokmat Group, the media conglomerate that brings out Maharashtra’s highest circulated regional daily. The awards represent an initiative to honour the best financial service intermediaries in the private sector.

Accepting the award, Amitabh Tapadar, Chief Marketing Officer, Tata AIA Life, said, "The award is a testimony of our endeavor to be the most trusted life insurance company that values customers' financial well-being, while consistently delivering best-in-class solutions."

Tata AIA Life Insurance with a philosophy of doing the Right Thing with the Right People in the Right Way has launched a series of customer-friendly products, several customer-centric initiatives and innovative services to cater to the needs of its customers.

The Company, which has a presence in more than 140 cities and towns in the country, has been awarded six ISO certifications for customer-centric intent and processes. This includes an ISO 10002:2004 certificate for setting up a Grievance Redressal Cell, the first-of-its-kind achievement in the domestic life insurance industry.

For the financial year 2013-14, the Company has posted a net profit of Rs. 412.95 crores. During the same period, it had a healthy Solvency Ratio of 409%, and an Asset Under Management (AUM) of Rs. 17,522.73 crores.

Wednesday, 2 July 2014

ICICI PruLife, StanChart enter into bancassurance tie-up

Standard Chartered Bank today announced that it has entered into a strategic bancassurance partnership with ICICI Prudential Life Insurance Company Ltd (ICICI Prudential Life).

This is part of a larger agreement between Standard Chartered Plc and Prudential Plc to expand the term and geographic scope of their pan-Asian bancassurance partnership.

The new 15 year agreement covers India and 10 other markets and has commenced on 1 July 2014, deepens a relationship that was first established in 1998.

Under the terms of this agreement, Standard Chartered Bank will distribute a wide array of ICICI Prudential LifeĆ¢s comprehensive life insurance products through its network of 99 branches across 42 cities.

Sunil Kaushal, Regional Chief Executive, India & South Asia at Standard Chartered Bank said that the alliance with ICICI Prudential Life is a reaffirmation of our commitment to our customers and it enables us to offer them best-in-class life insurance products for their various needs.

Sandeep Bakhshi, Managing Director & CEO, ICICI Prudential Life explained that their (Standard Chartered) customer centric approach is very much in sync with the company's customer first philosophy.

Contact Us


Email *

Message *