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Govt looks at allowing 100% foreign owned insurance brokers

Dec 06, 2018

The Indian government is mulling allowing 100% foreign direct investment (FDI) in insurance broking to give a boost to the sector, sources say.

Representations have been made to the government time and again for insurance broking firms to be treated at par with other financial services intermediaries, where 100% foreign investments are permitted, reports Press Trust of India.

Currently, the FDI policy imposes a ceiling of 49% on foreign holdings of stakes in insurance brokers, insurance companies, third party administrators, surveyors and loss assessors, as defined by the Department of Industrial Policy and Promotion (DIPP).

The DIPP is an arm of the Commerce and Industry Ministry which deals with FDI related matters and promotes ease of doing business in the country.

"Insurance broking is like any other financial or commodity broking services. The issue was recently discussed in a high level inter-ministerial meeting. The government is positively looking at the matter," sources said.

Source: Asia Insurance Review

Draft rules propose lower capital for insurance marketing firms

Dec 06, 2018

The insurance regulator has proposed to relax rules for the registration of insurance marketing firms (IMFs) with an aim to improving insurance penetration in the country.

In June, the IRDAI had formed a committee to review regulations for IMFs which are registered by the regulator.

Based on recommendations made by the panel, the IRDAI has proposed several changes in the existing framework governing IMFs, reported Press Trust of India.

Among the changes, the IRDAI is considering reducing the net worth requirement to INR500,000 ($7,000) for those applying for an IMF licence. The current minimum capital requirement for registration as an IMF is INR1m.

IRDAI has also proposed expanding the basket of products which can be marketed by an IMF to include group insurance products for micro small and medium enterprises (MSMEs), crop insurance for non-loanee farmers and combi products.

IMFs were introduced by the IRDAI in 2015 to improve insurance penetration in the country through an area-specific approach. A total of 117 districts in 28 states are designated for IMFs to operate in.

IRDAI is seeking feedback from stakeholders on the proposed changes with submissions to be made by 15 December.

Source: Asia Insurance Review

Regulator could liberalise mandatory auto insurance pricing in 2020

Dec 05, 2018

The insurance regulator has indicated that it would stop setting tariffs for compulsory motor third party liability (MPTL) insurance with effect from the fiscal year starting 1 April 2020.

MPTL is the only business line for which the IRDAI currently sets tariffs. IRDAI's decision would pave the way for insurance companies to set all their own pricing, reported Times of India. The rates could fall because of stiff competition.

Officials told the Times of India that stopping the fixing of MTPL tariffs came up for discussion last week when the Prime Minister’s Office held a meeting to discuss the demands of truckers who called on the government to roll back a steep increase of nearly 28% in their premium in the current fiscal year. Mr Piyush Goyal, who acted as finance minister from 14 May to 22 August, had assured truckers’ organisations that the premium hike would be lowered to 15%, but action is still pending on this.

Source: Asia Insurance Review

G Srinivasan appointed director of National Insurance Academy

Dec 03, 2018

Mr G Srinivasan, former chairman-cum-managing director of New India Assurance Company, India's largest general insurer, has been appointed the director of the National Insurance Academy (NIA) at Pune.

Mr Srinivasan’s appointment will be for a period of three years or until he attains the age of 65, whichever is earlier from the date of taking charge at his post.

Mr Sushobhan Sarker, the previous director of NIA had completed his tenure on 31 October this year. Mr Srinivasan superannuated from the post of chairman-cum-managing director of New India Assurance in July 2018.

NIA is a premier insurance academic institute sponsored by the Indian public sector insurance industry. Besides running the two-year flagship post-graduate diploma in insurance, it also conducts a variety of short duration courses in insurance for the Indian insurance industry.

A chartered accountant and fellow of the Insurance Institute of India, Mr Srinivasan has won many accolades from various organisations in the market. An active practitioner and lobbyist for the industry good, he served in many government committees in India as well as in the IRDAI during his career with the public sector general insurance industry in India.

Mr Srinivasan was also the winner of the Personality of the Year award at the 2016 Asia Insurance Industry Awards. He was also instrumental in successfully guiding in November 2017 the IPO of New India.

It is perhaps befitting that Mr Srinivasan with his impeccable career and over three decades of experience in insurance, would now guide the young insurance talent that would steer the Indian insurance industry in the years to come. Mr Srinivasan has always been active in drawing the “intelligent, confident tech-savvy: genY” into the insurance business. And to those in the business, he urges them to “keep constantly up to date”.

He cherishes the challenges and joy of meeting a variety of people, understanding so many businesses, coming to the assistance of people when they are in need and helping many to rebuild their lives when the chips are down.

NIA was established in 1980 jointly by the Ministry of Finance, Life Insurance Corporation of India, General Insurance Corporation of India, The New India Assurance, National Insurance, United India Insurance and Oriental Insurance.

Source : Asia Insurance Review

Life insurance to be cheaper while health insurance becomes more expensive

Nov 30, 2018

Buying life insurance is likely to get more affordable, while health insurance could get dearer. Improved life expectancy among the insured population will keep the cost of life cover down, but the cost of health covers is expected to move up because of various court directives asking insurers to cut out exclusions.

Mr Sanket Kawatkar, head of life insurance at actuarial consulting firm Milliman, said that there is an improvement of around 10% in the new mortality table, which is prepared by the Institutes of Actuaries of India, according to a report in Times of India.

According to Mr Kawatkar, insurers may choose not to reflect the new tables because life insurance premiums are already the lowest in the region.

Global reinsurers are bullish on India as it is seen as the market with the highest latent demand. “The protection gap in India is estimated at $9trn, making it one of the biggest markets in terms of potential,” said Mr Kawatkar, consulting actuary with Milliman.

Health insurance is expected to see an increase in rates. According to Mr Lalit Baveja, senior health management consultant at Milliman, the scope of health insurance in India is set to increase due to court interventions for covering hitherto excluded illnesses like HIV, mental ailments and congenital defects.

“Insurance companies will have to rework all their existing products to address these exclusions and file them with the insurance regulator with revised pricing,” said Mr Baveja.

Source : Asia Insurance Review

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