More than 75 percent of privately owned vehicles including two wheelers do not have insurance cover, said a committee headed by former Supreme Court judge K.S.Radhakrishnan on implementation of various laws relating to road safety, describing the situation as "alarming".
Asking the government identify these vehicles, Justice Radhakrishnan on Friday said that this came to surface during the committee's interaction with the Insurance Regulatory and Development Authority.
In most of the cases, the insurance was not renewed after lapsing, he said.
According to the panel, 82 percent of the total vehicles in the country are privately owned and out of this 72 to 73 percent are two-wheelers and 10-12 percent are cars.
The panel, which also included former surface transport secretary S. Sunder and Central Road Research Institute's former chief scientist Nisha Mittale was interacting with media on its work in last one year.
The committee, mandated to "measure and monitor" the implementation of various laws relating to road safety in each state and by different ministries, department and agencies and starting its work on May 15, 2014, has made 13 recommendations covering various aspects of implementation of road safety and related laws including establishing road safety fund, removing encroachments on pedestrian paths and making liquor shops out of sight from national and state highways.
The committee has given time till June 30 to comply with these directions and thereafter it would review their implementations and issue more directions.
The core of the road safety is that people should identify themselves with the problem, Justice Radhakrishnan said, because what has happened to an accident victim today can happen to anyone in future as no one is immune from violation of road safety laws.
Saying that Chandigarh could qualify being "good" on road safety norms, he regretted at the level of ignorance about the term "black spot" Or "Road Safety Audit" amongst the agencies tasked with the implementation of road safety laws.
Pointing out that there was a huge mismatch between the number of vehicles and the traffic police personnel to enforce the road safety laws, Justice Radhakrishan said: "Number of vehicles are increasing, human being are increasing but the traffic police in the states in just one percent or even less of the total police force."
Noting the level of disregard, Dr. Mittal said that the current decade is a "Road Safety Decade" but half the time has already passed with nothing happening.
Claiming road safety is not on the government's agenda, she said that during "deliberations, their (officials) approach is positive but noting is being done for the fear of annoying the vote bank".
Meanwhile, Sunder said: "It is the responsibility of the state to find out which vehicle was involved in the hit and run accident and not been able to do so is its failure of the state."
He also said that the government must bear the responsibility of providing medical care to such victims.
Source: News.webindia123.com
India may soon have regional insurance companies operating only in select locations and regions.
In its amendments to the Registration of Indian Insurance Companies Regulations (draft), Insurance Regulatory and Development Authority of India (Irdai) has asked new applicants to specify the city, region or concentration (rural/urban) that they will concentrate on.
Senior Irdai officials said that they would like to have insurers in specific regions.
"Prospective applicants need not open branches all across the country. They can have operations only in few cities or rural, urban centres," according to an official.
For the regions, the options are north, south, east, west and central. Similarly, insurers can give details of which metropolitan city they wish to operate in, including Mumbai, Delhi, Calcutta or Chennai. Their rural, urban concentration can be pre-determined at the time of application for a license with the regulator.
Industry officials said that while new applicants may not look into having operations only in few metro cities, having a rural or urban presence can in fact help them build a niche. Till now, all insurers have all-India presence though business is generated only from a few cities.
"Out of the fifty plus insurers, each insurance company is strong only in a few locations and regions. Public sector insurers largely have been dominating in the rural areas. It will be beneficial for policyholders if there are new insurers only looking into specific regions,” said the chief executive of a private life insurer.
However, some insiders said that the capital requirement of Rs 200 crore could be a deterrent for small players entering as regional insurers. In its draft, the regulator has specified that irrespective of where they operate, all new entrants into the industry would have to maintain a minimum capital of Rs 200 crore.
Earlier, there were a few interested firms who wanted to enter the industry as regional health insurers when it was proposed that capital requirement will be brought down to Rs 50 crore. Regulatory officials had also decided to give a go-ahead to these firms, but in the end capital requirement was not brought down.
To have a niche category of insurers that differentiate themselves from others, the applicants have also been asked to specify which distribution channel they would use - online, direct, tied-agents, brokers among others.
Source: Business-standard.com
One in every four customers are unlikely to choose the same Insurance service provider next time, a study in India has shown.
The 2015 study on Customer Loyalty in the Life Insurance Sector by Indian Market Research Bureau International has shown that 26% of customers are unhappy with their current insurance providers are unlikely to renew their insurance the following year.
Although High Risk customers who choose to discontinue with their existing life insurance providers have halved over the last two years, the survey showed.
Customers' grievances have been resolved significantly and the guidelines set by the Insurance Regulatory and Development Authority are working in favor of the customers.
Customers also seem to be happier with the services being provided to them. They are being reminded of their due dates regularly and are receiving the premium receipts on time for the payments that they make.
"IRDA regulations have had a significant impact on the way insurance players have ramped up their products and services," said, Praveen Nijhara, VP, CSMM, IMRB. He also added that the study provides a thorough analysis of customers' perceptions and it helps companies to reduce the risks relating to potential loss of customers.
Number of customers using the online channel to make payments has also shown a sharp growth.
The report also states that close to 60% customers are Truly Loyal to their insurance providers.Truly Loyal customers are those who are loyal towards a particular brand and are certain to buy more.
Unfortunately, new customers gave low ratings on 'Ease of using the website for transacting'. So the companies are gearing the Agents up on technology to improve their modules on product knowledge and soft skills.
It is also found that customers who bought insurances through agents have weaker perceptions and experiences about the companies. The Insurance sector also needs to focus on the Agents, according to the report.
The report is based on the responses from over 6500 customers from across 15 cities.
It has taken a devastating earth quake to shake homeowners in India out of their slumber. Seeing the trauma and destruction in Nepal, everyone wants to know whether they can insure homes against earthquakes and how much would it cost.
Very few people take home insurance in India. "Even though it is very cheap, less than 1% of people who can afford home insurance actually buy this cover," says Tapan Singhel, Managing Director and CEO, Bajaj Allianz General Insurance Company.
This is surprising because India is disaster-prone. As much as 30% of the Indian landmass is prone to earthquakes of severe intensity. Another 27% is prone to moderate earthquakes. Nearly 12% of India is prone to floods and 76% of its coastline is prone to cyclones and tsunamis. "Even if someone buys home insurance, it is for a very short tenure. There is a greater need to buy a cover against disasters," says KK Mishra, Managing Director and CEO, Tata-AIG General Insurance.
How much it costs
A 1,500 sq ft house can be covered for Rs 50 lakh against fire and other perils for less than Rs 1,700 a year. If contents worth Rs 10 lakh are included, the cost will go up by Rs 400. You don't need to take a cover for the market value of the property but only for reconstructing it. Construction costs vary from Rs 1,000 per sq ft for a no-frills structure to almost Rs 3,000 per sq ft for premium.
Some companies offer discounts if you buy a comprehensive policy with additional coverage. We like the Householder Policy from Oriental Insurance that offers an array of 10 covers and gives discounts to buyers who tick on more than four. The policy covers nearly all the risks that your house and valuables are exposed to. A basic cover of Rs 50 lakh for the building and Rs 10 lakh for the contents is as cheap as Rs 2,100 a year (see table). It can be bought online, though you might have to spend 40-50 minutes on drawing up an inventory of the items you need to cover.
As the cost of reconstruction keeps rising, you might have to increase the insured amount every few years. Some insurers offer discounts if you take a multi-year policy. If the premium for a Rs 50 lakh cover is Rs 3,800 a year, it will be 18% lower at Rs 15,590 if you buy a five year policy. If the escalation of rebuilding costs is a worry, HDFC Ergo has a policy where the sum assured goes up every year. The basic insurance cover rises 10% every year. The premium of the escalation option is higher at Rs 19,100 compared to Rs 15,590 charged for a normal Rs 50 lakh cover for five years.
What gets covered
While all home insurance policies offer cover against earthquakes, some insurers have a compulsory 5% deductible in case of damage due to an "act of God". An act of God is any event, especially a natural disaster, for which no individual can be held responsible. The deductible means that if your house is insured for Rs 50 lakh, and it suffers a damage worth Rs 20 lakh, the first 5% of the claimed amount (or Rs 1 lakh) will be borne by you. Some insurers don't even have such deductibles. "Policies covering individual residences or dwellings with individual owners do not have compulsory deductibles. However, policies covering housing societies are subject to deductibles depending on the sum insured," says Subrahmanyam B, Head, Health & Commercial Underwriting, Product Development and Reinsurance, Bharti AXA General Insurance.
In some policies, this deductible can be customised. Raise the deductible, and the premium goes down.
What is not covered
While you can cover the contents of the house against damage and theft, some valuables are not covered. Cash, documents, share certificates and debit or credit cards are not included. Jewellery and other valuables are covered, but subject to ceilings. Some policies specify that the cover for jewellery will not exceed 25% of the total contents insurance cover sum insured or Rs 1 lakh, whichever is lower. The individual responsible for the theft is also critical to the claim getting passed. "If the contents have been stolen by a relative or a household help your claim will not be admitted," says financial planner Pankaj Mathpal. When covering appliances and gadgets, ascertain the cost of replacing the item. An item is insured for its market value after depreciation. The insurance company will pay the amount required to restore an item to the condition it was in before damage. Simply put, a refrigerator or an airconditioner might have cost you Rs 40,000 about five years ago, but its depreciated value will now be Rs 20,000-22,000.
Source: Timesofindia.indiatimes.com
The Union Cabinet Wednesday gave approval to three mega social security initiatives -- one pension and two insurance schemes -- to be launched by Prime Minister Narendra Modi on May 9.
The schemes -- Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY)-- will be launched in Kolkata, the capital of West Bengal where assembly elections are due next year.
"Cabinet approves operationalisation of APY, PMJJBY & PMSBY in all states and UTs," said a tweet by the PIB.
An official release said the decision on APY will benefit 2 crore subscribers in the first year, and that on PMSBY and PMJJBY will provide affordable personal accident and life cover to a vast population.
The initiatives are aimed at providing affordable universal access to essential social security protection in a convenient manner linked to auto-debit facility from bank accounts.
The schemes are expected to address the issue of very low coverage of life or accident insurance and old age income in the country, a Finance Ministry statement had said.
PMSBY will offer a renewable one-year accidental death-cum-disability cover of Rs 2 lakh for partial/permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of Rs 12 per annum per subscriber.
The scheme would be administered through public sector general insurance companies or other general insurance firms willing to offer the product on similar terms on the choice of the bank concerned.
PMJJBY on the other hand will offer a renewable one year life cover of Rs 2 lakh to all savings bank account holders in the age group of 18-50 years, covering death due to any reason, for a premium of Rs 330 per annum per subscriber.
The scheme would be offered or administered through LIC or other Life Insurance companies willing to offer the product on similar terms on the choice of the bank concerned.
The pension scheme will focus on the unorganised sector and provide subscribers a fixed minimum pension of Rs 1,000, 2,000, 3,000, 4,000 or Rs 5,000 per month starting at the age of 60 years, depending on the contribution option exercised on entering at an age between 18 and 40 years.
The period of contribution by any subscriber under APY would be 20 years or more.
The fixed minimum pension would be guaranteed by the government.
Source: Zeenews.india.com
The government may consider setting up a natural calamity insurance pool, especially in the wake of the Nepal earthquake that caused heavy loss of life and property, and sparked warnings that India too is at risk.
This insurance pool will be an addition to the existing national calamity fund and the Prime Minister’s Relief Fund.
Earlier in 2013, non-life insurance companies had presented a concept paper on the same to the National Disaster Management Authority (NDMA). The concept paper underlined the need to set up a pool to deal with such natural disasters.
The proposal is at a nascent stage, and the contours and the structure of the pool are yet to be decided.
“It is important to look into the issue, more so as several parts of India too are vulnerable to such incidents,” said an official source. The insurance pool is aimed at providing “event based insurance and ensure financial support to everyone affected by natural calamity.”
“Recent instances indicate that a large number of people affected by such calamities do not get any support due to lack of insurance cover, or they have to depend on government support. It is time we created such a provision that will support life, and help rebuild property in such catastrophes,” Rakesh Jain, CEO, Reliance General Insurance, told HT.
Several Indian cities, especially in the Himalayas and in the north-Indian states of Jammu and Kashmir, Uttar Pradesh, Uttarakhand, West Bengal, Assam and Delhi, fall under seismic zones.
With indiscriminate sprouting of high-rise buildings, the threat of damage in the event of any catastrophe is compounded.
Almost 60% of India is vulnerable to earthquakes. In 2001, the Gujarat earthquake claimed about 20,000 lives. The earthquake in Nepal last week has left over 6,000 dead.
Source: Hindustantimes.com
Prime Minister Narendra Modi will launch the flagship social security schemes, including Rs 2 lakh accident cover at a premium of just Re 1 per month, in Kolkata on May 9.
These schemes, to be launched by Modi, are aimed at providing affordable universal access to essential social security protection in a convenient manner linked to auto-debit facility from the bank account of a subscriber, a Finance Ministry statement said.
These schemes were announced in the Budget by Finance Minister Arun Jaitley on February 28.
The two insurance schemes -- Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) -- would provide insurance cover in the unfortunate event of death by any cause, death or disability due to an accident, whereas the pension scheme -- Atal Pension Yojana (APY) -- would address old age income security needs, it said.
The convenient delivery mechanism of the schemes is expected to address the situation of very low coverage of life or accident insurance and old age income security products in the country.
PMSBY will offer a renewable one year accidental death cum disability cover of Rs 2 lakh for partial permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of Rs 12 per annum per subscriber, it said.
The scheme would be administered through Public Sector General Insurance Companies or other General Insurance companies willing to offer the product on similar terms on the choice of the bank concerned, it added.
PMJJBY, on the other hand, will offer a renewable one year life cover of Rs 2 lakh to all savings bank account holders in the age group of 18-50 years, covering death due to any reason, for a premium of Rs 330 per annum per subscriber.
The scheme would be offered or administered through LIC or other Life Insurance companies willing to offer the product on similar terms on the choice of the bank concerned.
The pension scheme APY will focus on the unorganised sector and provide subscribers a fixed minimum pension of Rs 1,000; 2,000; 3,000; 4,000 or Rs 5,000 per month starting at the age of 60 years, depending on the contribution option exercised on entering at an age between 18 and 40 years.
Thus, it said, the period of contribution by any subscriber under APY would be 20 years or more.
The fixed minimum pension would be guaranteed by the government.
"While the scheme is open to bank account holders in the prescribed age group, the Central Government would also co-contribute 50 per cent of the total contribution or Rs 1,000 per annum, whichever is lower, for a period of 5 years for those joining the scheme before December 31, 2015 and are not members of any statutory social security scheme and are not income tax payers," it said.
