General insurance IPO norms on way

The insurance regulator will come out with a separate set of guidelines for general insurance (non-life) companies that are looking to tap the capital market with initial public offerings. The regulator is waiting for Sebi’s recommendations on the disclosure requirements.

According to R.K. Nair, member (finance and investment) of the IRDA, the disclosure requirement for non-life insurance companies will be different from those of life insurance firms given the nature of cash flows and risks underwritten by them.

“We are awaiting the recommendations of SCODA (Sebi Committee on Disclosures and Accounting Standards) which is still working on the disclosure requirements for non-life insurance companies. Once we get these recommendations, we’ll come out with the IPO guidelines,” Nair said on the sidelines of an insurance summit of the Indian Chamber of Commerce here today.

He declined to give any time frame for releasing the guidelines.

Early this week, the Insurance Regulatory and Development Authority (IRDA) unveiled draft IPO guidelines for life insurance companies. In the draft, the requirement that an IPO applicant should be profit-making has been replaced by the condition that the embedded value of a life insurer must be twice the paid-up equity capital of the company. The embedded value is the value of all in-force policies plus the net worth of a life insurance company.

Health Insurance | How to keep your insurance beneficial

Benefits of an insurance policy are obtained if your policy is going for the long term. The earlier you buy, the cheaper will be your life insurance premium. If you buy insurance at the right time, you surely don’t want to pass the benefits by missing your premium paying deadline because of a cash crunch or failing to notice.
The Insurance Regulatory and Development Authority (Irda) has provided a standardized window of opportunity for people to make up for late payment. In general insurance policies, especially health insurance, benefits get added for every year in which you don’t make a claim.
For unit-linked insurance plans (Ulips) and health insurance, the rules of reviving a lapsed policy have been standardized. A policy lapses when the premiums are not paid within the deadline or within the grace period of about a month after the main deadline. Here under are the current rules regarding the health insurance.
A health insurance policy needs to be renewed every year. It is obligatory on the insurer’s part to renew your policy, irrespective of the number of claims you may have made.
Till about a couple of years back, the concept of grace period did not really exist in the health insurance sector. Insurers considered any late payment as a break in the policy and refused to renew which was a cause for concern especially for senior citizens (as it meant no health insurance at all).
In March 2009, the sectoral regulator standardized this process. It made it mandatory for the insurers to clearly state the terms and conditions of renewal, including the age up to which a policy could be renewed. Insurers were also required to give indicative premiums of future renewals. Apart from these renewal norms, Irda introduced a window of a grace period of at least 15 days. So you got another 15 days after the due date to renew your policy.
But now: Though Irda has put in place the rules, they are still not followed to the last word.
In reality some state-run insurers give only a 7-day window. However, this is more a problem of internal communication and as a customer it means approaching the higher ups like the regional office or main office for a 15-day extension. The rules of the game are in favor of the policyholder so one should take all necessary measures to keep important insurance policies from lapsing.

Reliance Life forays keen on health insurance

Anil Ambani Group Company Reliance Life Insurance today announced foray into health insurance market with the launch of a product for individuals and family members.

"Reliance Life Insurance Company (RLIC)...forays into the health insurance market with the launch of its first pure reimbursement health insurance plan - ‘Reliance Life Care for You Plan’- for individuals and family members," Reliance Life said in a release.

The policy term under this plan is three years with the premium fixed for the entire period, irrespective of the claims. The plan offers sum insured of up to Rs 10 lakh. The company along with its third party administrators has created a preferred network of over 6,000 hospitals, among the largest hospital network offered by any insurer, across the country to provide cashless hospitalization benefit to the customers.

“Our venture into the health insurance sector is a natural extension of our life insurance business. ‘Reliance Life Care For You’ is our first step in the pure health Insurance space, aimed to help people meet their health care exigencies and expenses at every stage of life effectively,’’ Reliance Life President and Executive Director Malay Ghosh said.

IRDA on Health insurance cashless dispute

The Insurance Regulatory and Development Authority (IRDA) Friday said the issue of offering cashless treatment under health insurance policies issued by the four government-owned general insurers 'is getting resolved'. IRDA Chairman J. Hari Narayan said that prior to dispute there were only 300 government owned insurers as compared to 400 now.
The four government-owned non life insurers had earlier delisted major hospital chains from offering cashless hospitalization facility for their health insurance policy holders on the ground that the hospitals are over charging the patients.
He was in Chennai to launch the country's first health cum life insurance product introduced by the city-based Star Health and Allied Insurance Company Ltd partnering with private life insurer Shriram Life Insurance Company Ltd. when he clarified.
There are talks of creation of separate regulator for the healthcare sector. Also, Confederation of Indian Industry (CII) has said none of the major super speciality hospitals have signed with the Raksha TPA (third party administrator).
CII’s members are waiting for a response from the insurers and the TPA since the meeting Raksha in Delhi. As on August 12, the hospitals in Delhi have worked out the packaged rates for 42 procedures and submitted to the TPA.
Once cashless is restored in the empanelled hospitals, in the second phase, hospitals and insurers along with other stakeholders of the health insurance ecosystem and the competent authority would work on a classification of hospitals, which would be agreeable to all.

The other side:

Shivinder M. Singh, managing director, Fortis Healthcare said 'There will always be a differential in the levels of care and services provided by hospitals for a single type of illness. This differential is a function of structures, processes and outcomes. A scientific analysis of all these parameters is essential to grade hospitals.'
Sanjeev Bagai, CEO, Batra Hospital and Medical Research Centre said, 'This grading or categorization of hospitals should then translate into pricing of procedures in each grade. Premature conceptualization or inference of this complex process must be avoided'. It is essential that a comprehensive exercise be undertaken of grading hospitals based on their infrastructure, clinical expertise, technology base, clinical outcomes, competency of para-clinical man power, accreditation and standards of care is done.

Health insurance, Life mooted for school teachers

The government is planning life and health insurance cover and a group housing scheme at a subsidized price for 60 lakh primary and secondary school teachers.
While the two insurance schemes will need financial contribution by the Centre, the States and the teachers, the group housing scheme will be sprint at the Central level but will not require financial contribution from the Centre or the States, Union Human Resource Development Minister Kapil Sibal said on Friday. He was addressing a gathering of the National Foundation for Teachers Welfare here.
Thanks to their huge range, the health and life insurance schemes would premium-wise cost much less than individual schemes or even schemes run at the State level. The economics of scale would drive individual premiums down. The life insurance cover would guarantee a minimum of about Rs. 5 lakh on retirement and Rs. 2 lakh on death during service. The health cover, limited to hospitalization of the teacher, the spouse, two children and parents, was being worked on two options — either on a maximum cover of Rs. 1.25 lakh which would signify a lesser premium or a cover of Rs. 3 lakh this would mean a higher premium.
The group housing scheme is being envisaged to be Centrally-administered through a portal, with construction done by the National Building Construction Corporation (NBCC), ground bought at institutional rates and group housing societies formed by teachers. Thus, while there will be no cost to the government, the teachers will get excellence housing at lesser rates without much struggle or fear of being cheated.
To begin with, the Delhi Education Minister announced land for the housing scheme in the capital. Mr. Sibal said the proposals were to show that the country looked after, cared for and appreciated its teachers. He clarified that he too was yet to seek Finance Ministry support.

Religare opts for singly entry into health insurance business

Religare Enterprises is likely to foray alone in the Health Insurance space, though sources close to the development said that it had not lined out the prospect of roping in a partner later.
In June, Religare had signed a non-binding term sheet with Swiss Re to set up a health insurance joint venture. But three months later, the two parted ways.
“We are evaluating the option of going alone and may soon apply for R1, R2 and R3 license,” said Anuj Gulati, Chief Executive Officer Religare Health Insurance. R1, R2 and R3 are different stages of approval arranged by the Insurance Regulatory and Development Authority, with R3 being the final go-ahead.
So far, Reliance General is the only non-life insurer to not have any foreign joint venture partner.
On the life side, Reliance Life and Sahara Life do not have partners, though the previous is now in the hunt for an investor to raise funds to finance its expansion.
Insurers said foreign partners bring in knowledge to run the business, which is required more than the capital. The minimum capital required for setting up both life and non-life insurance is Rs 100 crore. More capital is required as the business grows but the need for funds on the general insurance side was minor.
Last year, when L&T parted ways with Travelers, it went ahead to seek regulatory approval for venturing into the non-life insurance gap.
The company expects to start process in another two months. Another tie-up that insolvent last year was Hero-Ergo and Indiabulls-Societe Generale while Edelweiss is setting up a Life Insurance joint venture with Tokyo Marine.
Insurance industry executives said that with the private sector present in the Indian market for nearly 10 years, local capacity had been created and that will help Indian companies go solo.
Apart from the fact that general insurance required lower capital, a group like Religare could easily put in the required funds till the company achieved break-even, the sources said.
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Aegon Religare to enter health insurance, launch upto 3 products

Private life insurer, Aegon Religare, plans to enter the health insurance segment while continuing to focus on term insurance products, a senior company official said.
Aegon Religare Life Insurance's Chief Financial Officer, K S Gopalakrishnan, said in Mumbai. "We are looking to enter the health insurance segment and will be filing upto three health insurance products with the IRDA in the last quarter of this fiscal,"
He said. The Company expects to launch at least one product this fiscal.
He said. "There is a huge market for pure protection insurance products and we want to be in this segment,"
Aegon Religare Life Insurance is a three-way joint venture between the Hague-based international life insurance pension and investment company, Aegon, financial services group Religare and media-house Bennett, Coleman and Company.
The twentieth entrant in life insurance industry, Aegon Religare, is also targeting to increase contribution of term insurance products to the number of policies sold by it.
Gopalakrishnan said. "We want term products to play an important part in our business. Presently, term products contribute 20 per cent to the number of policies sold and we are aiming to increase it to 30 per cent in the near future,"

Met life forays into health insurance Policies

‘Met Health Care’ offering daily cash benefits in the case of hospitalisation and the option of undergoing no medical test before availing of the cover. MetLife India Insurance on Monday announced its foray into the health insurance sector with the launch of an innovative scheme.
Benefit
The company said in a statement here. The product offers its customers a daily cash benefit in the case of hospitalisation and a lump sum benefit in the case of critical illness or accidental total and everlasting disability.

At the same time, customers are not required to undertake any medical tests to avail themselves of this plan.

Health insurance in India was today recognised as one of the primary safety needs for a family. MetLife India Managing Director Rajesh Relan said.

“Launching Met Health Care, our first health insurance product, is a natural development in our journey to offer the consumer a complete range of protection plans to suit their various needs,” he added.
Training
He said. MetLife has been among the top three fastest-growing life insurance companies for the last 30 months. The launch of the scheme would considerably balance the company’s existing products and services,

The company grows at 40 per cent last year while the industry was facing a slowdown.

Mr. Relan said. The product is being launched with full training to financial advisors across the country to provide need-based solutions to customers.
MetLife has over 55,000 financial advisors, all of whom have gone through accurate training to understand customer needs. He said the company believed in a multi-distribution approach for reaching customers across the length and breadth of the country.