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| M&A, public offer guidelines for insurance players in 2 months |
NEW DELHI: The Insurance Regulatory and Development Authority (Irda) is likely to finalise the guidelines for mergers and acquisitions (M&As)
of insurance companies in the next two months and is also looking to frame rules for public issue of shares by insurers, its chairman J Hari Narayan said on the sidelines of a health insurance conference on Friday.
Currently, there are no specific guidelines for M&As in the insurance space in India. The new norms would encourage consolidation in the sector.
“We are working on some M&A guidelines that will be finalised in the next couple of months,” said Mr Narayan on the sidelines of a conference organised by industry body Ficci. He added that the regulator is also looking to frame rules for insurance firms to float initial public offer (IPO) of shares to raise capital. Insurance is a capital-intensive sector and has huge fund requirements.
Asked about reduction in charges of unit-linked insurance plans (Ulips), Mr Narayan replied, “We have not taken any view at this point of time. Whatever would be best in the interest of policyholders and insurance companies will be done.”
Insurance was opened to private sector investments in 1999. Currently, there are 22 life insurers and 21 general insurance firms in the country. Life insurance is dominated by public sector behemoth Life Insurance Corporation of India (LIC) while the biggest player in the general insurance category is New India Assurance.
Besides, there is a string of private sector firms—many of them joint ventures with international insurance firms. Consolidation will lead to fewer but stronger players in the country.
As per Irda data, the life insurance industry clocked Rs 8,652 crore during April-May this fiscal in first-time premium collection while sales in the non-life business stood at Rs 6,226 crore.
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| Health insurance council soon: Irda chief |
Insurance Regulatory Development Authority (Irda) is in talks with the government and other stakeholders to set up a self regulatory organisation for health insurance companies, said Irda Chairman J Hari Narayan.
Speaking on the sidelines of a CII health insurance summit, he said the proposal is with the government and could be in place by January or the end of this financial year. “This will involve amendment to the Indian Insurance Act,” he added.
A senior official from Irda said the new organisation may be called Health Insurance Council, which will have representatives from related industries and regulators.
Hari Narayan also said the Tariff Advisory Committee (TAC), a government-constituted body under the Insurance Act, is working on building a database like Cibil for health and motor transport.
The database, expected to be ready in two months, will help to create common standards for the industry and transparency in data collection and dissemination. At present, officials are working on the data and the format for reporting is being finalised. The new database will cover 90 million records and will be updated frequently, instead of the annual updation done now.
The chairman said Irda was also considering explaining products in local dialects. “The language of products and mechanics evolves through a process of interaction between the regulatory body and individual companies,” he said.
Hari Narayan said that 70-75 per cent health insurance claims are settled within a year of filing.
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| Chhattisgarh plans health insurance for 3.5 mn families |
The Chhattisgarh government Tuesday announced it would provide health insurance cover to about 3.5 million impoverished families.
The state's Bharatiya Janata Party (BJP) government said it will cover nearly 3.5 poverty-hit families across all the 18 districts under a health insurance plan in a phased manner.
The insurance will cover the families' annual health expenses up to Rs 30,000 at selected government as well as private hospitals, an official said.
Chief Minister Raman Singh has instructed the health department officials to begin implementing the scheme in which the poor families don't require to pay a single rupee.
In the first phase, the scheme will cover nearly 1.1 million families of Raipur, Durg, Rajnandgaon and Bilaspur districts besides two worst-poverty hit districts of Bastar and Surguja.
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| Insurance benefits for Karkare's kin |
The Maharashtra government on Tuesday decided to extend insurance benefits to slain ATS chief Hemant Karkare. However, as Karkare was not
covered under the government's insurance policy, an amount equal to what would be given if he had been covered, would be given to his family.
Home minister Jayant Patil made this announcement while replying to a question by state BJP president Nitin Gadkari in the legislative council. He said that as different posts in the ATS were created at different times, therefore all ATS personnel could not be insured.
A proposal for collective insurance of all personnel was mooted and was pending with the government. The post of the ATS chief, who is of the rank of inspector general, was not covered under the insurance. It would take some time to make a final decision on the proposal.
Opposition members grilled him on senior Congress leader Digvijay Singh's allegations that the police negotiated with Mumbai terrorists. Shiv Sena's Diwakar Rawte sought to find out how a TV channel received calls from the terrorists.
Patil also announced that a special court will be set up for the trial of captured terrorist Amir Kasab.
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| Insurance ind estimates fall in growth of premium turnovers |
Insurance industry is likely to register a fall in the growth rate of its premium turnovers in the current fiscal due to the global
meltdown, IRDA Chairman J Hari Narayan said.
"The growth rate of premium turnover is estimated to come down to 17 per cent in the current year, against 24 per cent last year," IRDA Chairman J Hari Narayan said here on Tuesday.
Narayan, however, said the actual turnover may be more than last year, but the growth rate will be lower.
Further, without referring to the numbers, he added, the valuations on investments have also impacted badly due to financal downturn.
Narayan said the insurance companies, however, have not lost their financial strength due to the downturn, but their profitability may be hit.
"The companies are maintaining the solvency norms as insisted by the IRDA," he added.
A life insurance company has to maintain 1.5 times the laibility of the company towards solvency margin amount.
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