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eServe Newsletter March 2012
LIC's Jeevan Vriddhi
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Health protection plus claim – A live example
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Budget Expectations: Four things that insurance sector wants from Budget
09-Mar-2012 Source : Moneycontrol.com
By Shashwat Sharma, Partner - Advisory, KPMG
Raising the cap on FDI: Given the capital intensive nature of insurance business , raising the cap on FDI to 49% will provide incentive to foreign companies to invest in the JV company. Separate limit for life and health insurance premiums: There is a need to set a separate limit of INR 1 lakh for life and health insurance premiums. This would help improve insurance density (India- USD 55.7 ; China-USD 158.4) which continues to be low amongst emerging markets.
Service tax exemption on term and health insurance products: In virtual absence of a government backed social security and rising health care costs, there is a need to provide incentive to build a safety net. Exemption of service tax on term products for life and health insurance premiums up to INR 10,000 can help achieve the same. Service tax exemption on preventive checkups: Preventive health checkups should be exempted from service tax. Rise in lifestyle diseases are posing a fresh challenge and preventive checks can provide timely intervention.
LIC to pay claims in South via fund transfer system from April
02-Mar-2012 Source : PTI
The settling of LIC’s claims through the National Electronic Funds Transfer ( NEFT) system across four states in South India will take off in April, a senior official said. The move is aimed at reducing the use of cheques in settling claims to avoid delays due to their getting lost or damaged, said LIC Zonal Manager D D Singh."We are going live from April.. Almost all the 13 divisions of LIC are ready to offer the service (from April onwards)..", Singh told.
Earlier, LIC undertook this proposal as a pilot study in Kochi (in Kerala) and also, in some parts of Tamil Nadu. Following its success, it has been decided to implement it across the south zone, he said. LIC currently has about 39 crore customers across the four southern states, he added. Stating that the proposal would ensure "fast" and "secured" process of depositing the claims of a customer, Singh said leading banks from both private and public sector banks have tied-up with LIC for this service."This is just to ensure accuracy. Today, everybody opts for a bank account and with this system, we will be able to reach the customer directly (for settling the claims)..", a company spokesperson said.
On future plans, Singh said they have planned to issue about 51 lakh policies by end of this month. Last fiscal, the company issued about 50 lakh polices across all its segments. "Every year, we grow by 10-15 per cent.This year we are expecting the same..", he said.
IRDA slaps Rs 12 lakh penalty on Sahara Life Insurance
01-Mar-2012 Source : PTI
Insurance sector regulator IRDA slapped a fine of Rs 12 lakh on Sahara Life Insurance Company promoted by Subrata Roy-led Sahara Group for violation of various regulations, including delay in death claim settlement. "Accordingly, in exercise of the powers conferred upon me under the provisions of the Insurance Act, 1938, I hereby direct the insurer to remit the penalty of Rs 12 lakh," IRDA Chairman J Hari Narayan said in an order against insurer. The company, set up in 2004, has been directed to pay the fine within a period of 15 days from the date of receipt of the order, it said.
The Insurance Regulatory and Development Authority (IRDA) observed that the insurer allowed unlicensed entities to solicit business through dummy codes and paid commission to such entities. "Taking into account the seriousness of the violation, a penalty of Rs 5 lakh is imposed on the insurer under Section 102(b) of the Insurance Act, 1938," IRDA said in the order. Besides, Sahara Group promoted life insurance company also allowed ineligible person to act as specified person, the order observed. The insurance regulator also found Sahara Life guilty of licensing ineligible entities as corporate agent.
In its order the regulator said, "it is observed that the corporate agent D K Associates has solicited business through unlicensed persons as evident from the six sample proposal forms obtained during the course of inspection."