Page 10 - Insurance Times January 2024

seeking specific information regarding value and lower charges for life insur- mium before surrendering the policy, a
the general partners (GPs) backing Sa- ance companies. life insurance company is mandated to
mara Capital, said two sources. In An exposure draft released by the in- provide a specific surrender value to the
March, Aditya Birla Capital had ap- surance regulator pitched for a signifi- policyholder.
proved sale of 50% share capital in its
cant increase in the surrender value "There shall be a premium threshold
insurance broking business to Edme Ser- specifically for non-participating insur- defined for each product, wherein,
vices, part of Samara Capital group, an
ance products. Some modifications have there shall not be any surrender charges
affiliate of Samara Alternate Invest- also been suggested in the calculation imposed on the balance of the premi-
ment Fund, for 455 crore. The insurance of surrender charges. ums beyond such threshold limits, irre-
broking business is providing advisory spective of the timing of the surrender,''
services to companies, individuals and In insurance policies, 'surrender' indi- the exposure draft said. There are varia-
reinsurance solutions to insurance com- cates the voluntary conclusion of a life tions in the threshold defined among
insurance policy opted by the policy-
panies.
holder prior to its maturity or before the different products depending on
their nature and design.
IRDAI mulls lower charges, the occurrence of the insured event.
higher surrender value for This will result in the cessation of pre- Policy aid coming for insur-
mium payment and the policyholder's
life policies insurance cover. However, as the poli- ance sector
IRDA has mooted a higher surrender cyholder would have paid some pre- A parliamentary panel is set to suggest
policy measures for the insurance sec-
tor to equip it to deal with the impact
IRDAI sets up panel to increase banks' participation of natural calamities on large infrastruc-
in selling insurance products ture projects, people familiar with the
IRDAI has set up a high-level panel to suggest steps to increase the participa- matter told.
tion of banks for easy availability of insurance products across the country. The standing committee on finance-
Despite the large network of banks through their branches across the length headed by former minister of state for
and breadth of the country, the contribution of the lenders as corporate finance Jayant Sinha has considered is-
agents was 5.93 per cent of non-life premiums and 17.44 per cent of new sues around reinsurance following com-
business premiums for life insurance in 2022-23. plications in insurance claims related to
the Teesta Stage III Hydropower
IRDAI said banks are engaged in the distribution of insurance products as
corporate agents and/ or as master policyholders subject to the applicable project in Sikkim that was washed away
regulatory framework. by a glacial lake outburst.
The power project, which was com-
While banks have the option to set up a separate legal entity for the distribu-
pletely washed down by a glacial lake
tion of insurance products as insurance brokers, till date, such an option has
not been exercised by banks, it said. outburst flood, was insured for Rs.
11,400 crore by a consortium of insur-
"One of the ways of reaching the last mile and making available insurance
ers, including a public sector entity, but
products to the nook and corner of the country is leveraging the vast bank reinsurers capped the payout at Rs. 500
branch network," the IRDAI said in a circular while setting up the taskforce crore.
on bancassurance.
They cited the contract that provided
To achieve the objective, the regulator said it is felt necessary to review the compensation would be limited to Rs.
existing bancassurance intermediation model and carry out modifications, if 500 crore in the event of glacial lake
any, to the regulatory framework governing the same, with a focus on the outburst flood (GLOF). Policymakers in
protection of policyholders' interest.
the government are worried that this
The task force is headed by J Meena Kumari, Executive Director (Life), IRDAI. could pose a serious issue for large in-
The panel also has representations from banks and insurance companies. frastructure projects and other hydro-
power projects. Insurance premium for
The panel has been asked to suggest regulatory stipulations on the market
conduct requirements of bancas-surance partners, especially in view of infra projects have already gone up.
misselling/forced selling complaints in the distribution model. "We have to come up with policy solu-

10 January 2024 The Insurance Times