Page 45 - Life Insurance Today June 2015 SAMPLE
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manner, and also to strengthen their matter material to the grant of a than 50 per cent of its business with
grievance redressal teams. Irdai has cover. any one insurer.
given a circular to insurers stating that
sensitivity and alacrity should be shown IRDAI caps corporate Exposure to BFSI subject
while attending to complaints from agents business to ceiling
policyholders and from other statutory
agencies. The Insurance Regulatory and Develop- IRDAI has fixed a capping of not more
ment Authority of India (Irdai) has put than 25% of the premium income in
"We do have turnaround times that a cap on business from insurers in the shares, bonds and deposits of insur-
are part of the business strategy. But life, non-life and standalone health cat- ance companies.
in some cases, due to lack of adequate egories. Irdai, in its exposure draft on
information and documentation or in licensing, has said no corporate agent A move aimed at reducing systemic
orphaned policies, there are delays," can receive more than 90 per cent busi- risks that could amplify losses when
said a senior life insurance executive. ness from one insurer in life, non-life or the financial sector faces a crisis.
health in its first year of operation.
As per the Protection of Policyholder's The successful passage of the Insur-
Interest Regulations 2002, an insurer Due to the new draft, exclusive tie-ups ance Bill recently has led the regula-
carrying on life or general business has between banks and insurance compa- tor to take up the issue of linkage of
to respond within 10 days of the re- nies as corporate agents would be a financial services sector, something
ceipt of any communication from its thing of the past with the regulator that the Reserve Bank of India has also
policyholders. imposing a cap on the maximum busi- been pointing out in its half yearly sta-
ness a bank can receive from one in- bility reports.
These include matters such as record- surer. The insurance regulator has now
ing change of address, noting change allowed banks to tie up with a maxi- However the Insurance companies
of nomination, issuance of duplicate mum of three insurers each from the are reluctant saying that it may re-
policy and providing information on life, general and health segments. duce returns for investors when the
matters like accrued bonus, surrender sector is expected to revive economic
value and entitlement to a loan, According to current rules, corporate growth.
among others. agents like banks and non-banking fi-
nance companies are allowed to tie up As per the notification, the insurance
Irdai regulations state that where a with only one life insurer, one non-life companies will be allowed to invest up
proposal form is not used, the insurer insurer and one standalone health in- to a quarter of the total investible cor-
shall record the information obtained surer. pus in BFSI sector. This will mean that
orally or in writing, and confirm it insurers will have to freeze their invest-
within a period of 15 days and incor- Furthermore, the insurance regulator ment in the sector or begin realigning
porate it in the policy. has mandated that not more than 75 their sectoral exposure.
per cent of the premium shall be
Here, the onus of proof rests with the placed with any one insurer in the sec- Life insurance industry manages assets
insurer in respect of any information ond year and not more than 60 per worth Rs 23 lakh crore. Of this, state-
not so record, where the insurer cent of the premium can be placed owned Life Insurance Corporation man-
claims that the proposed suppressed with any one insurer in the third year ages Rs 18.5 lakh crore. Insurers are
any material information or provided of operations. From the fourth year, struggling to match the return offered
misleading or false information on any no corporate agent shall place more on tax free bonds and fixed deposits.
I know from my constituency what is going on. Doctors that are told, begged, by mothers, 'Please don't write down that my child as
asthma. Please lie and say it's bronchitis, because if you write down asthma, when my child turns 18 or 20 and has to get his or her
own insurance, it will be a pre-existing condition.'
Life Insurance Today June 2015 41
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