Page 50 - Insurance Times March 2016 Sample

it aligned with the amendments in the Insurance Act 1938, interests of policyholders and prevent unhealthy market
and the regulatory prescriptions made by the Authority with practices and, in exercise of powers vested in the Au-
respect to Registration of Branch Office of Lloyds and other thority under Section 14 of IRDA Act, 1999, it is hereby
Foreign Reinsurers. The revision is being made in order to clarified that there shall be no restriction whatsoever on
streamline the regulatory process with respect to cross bor- sourcing/servicing of motor insurance business (includ-
der reinsurers. ing personal accident policies, wherever applicable) by
any agent/intermediary or insurer/insurance office on
These guidelines as attached are issued by the Insurance the ground that they have tie-up with any motor deal-
Regulatory and Development Authority (IRDA) under the ers/manufacturers etc. Further, it shall be ensured that
powers granted to it under Section 14 of IRDA Act, 1999. no clause/agreement/tie-up in variation with the above
The revised guidelines shall be effective for all reinsurance directions shall be entered into by any insurer with any
business transactions commencing/ effective from 1st April motor dealers/ manufacturers etc. It should also be en-
2016. sured that all existing agreements confirm with the above
direction.
Filing of the Cross Border Reinsurer Information sheet for RI
programme 2016-17, in the online portal, shall commence (T S Vijayan)
from 01.02.2016. Chairman

Suresh Mathur Industrial All Risks (IAR) Policy
Sr. Joint Director (NL)
To All General Insurance Companies underwriting
Sourcing of Motor Business through Industrial All Risk (IAR) Policy
Agents and Intermediaries
Ref No- IRDA/NL/CIR/F&U/025/2016
To all General Insurance Companies
Date: 10.02.2016
Ref: IRDA/NL/CIR/MISC/024/02/2016
It has come to the notice of the Authority that some general
Date: 10-02-2016 insurers are issuing IAR policies to ineligible and non-indus-
trial risks. The Authority, vide circular no- 019/IRDA/NL/F&U/
1. It is well known fact that policyholders have a preroga- Oct-08 dated 06.11.2008 had removed the requirements of
tive to choose any agent, intermediary or any insurer to minimum sum insured, brought flexibility in deductibles and
avail of insurance services. Of late, it has come to the allowed add-on covers to be filed. It has also been brought to
notice of the Authority that some general insurance com- the notice that these relaxations are being misused by some
panies having tie-ups with a particular motor dealer are insurers.
not accepting motor business, if it is sourced by any other
agent or intermediary. Similar issue has also been ob- Selling IAR policies to risks other than industrial risks will be
served where some insurers offer personal accident poli- considered to be non- compliance. Therefore, all insurers are
cies along with such motor policies. advised to conduct detailed risk assessment by the engineers
and collect the claims experience etc before marketing the
2. In the above background, with a view to protect the policy under IAR tariff. The insurers may accordingly advise
the operating offices for compliance.

Insurance share to be available from 2016 onwards

2016 may be a year when insurers will list on stock exchange when HDFC Life and SBI Life announced that they will be
introducing two initial public offerings in the Indian market. Many believe SBI Life may trump HDFC Life in hitting the
market with an IPO as they have already hired insurance actuarial consultants. Both the companies are yet to get the
Foreign Investment Promotion Board approval for raising the stake. Earlier in 2015, HDFC had sold about 9% in the life
insurance business to Standard Life for Rs 1,700 crore, valuing the business at about Rs 19,000 crore, or about 1.9
times the estimated embedded value - which is net assets and present value of future profits of life insurance compa-
nies - for 2015-16.

50 The Insurance Times, March 2016