Page 6 - Insurance Times July 2016
P. 6

Over 50,000 farmers in After MFs, Insurance Cos to disclose pay of MD, CEO

Gujarat buys crop insur-                   Close on the heels of mutual funds         Chief Investment Officer, Chief Risk Of-
ance online                                (MFs) disclosing remuneration of its       ficer and Chief Actuary. Moreover, incen-
                                           top executives following a directive       tives paid to key management persons
Having faced the worst of droughts,        from SEBI, insurance companies have        are also typically not included.
farmers have started taking crop in-       also been asked to provide information
                                           on executive pay. The In-                                  Further, insurers should
                            surance seri-  surance Regulatory and                                     provide details of remu-
                            ously with     Development Authority                                      neration paid to inde-
                            more than      of India has directed in-                                  pendent directors. "All
                            50,000 of      surance companies to                                       pecuniary relationships
                            them in        disclose details of remuneration paid to                   or transactions of the
Gujarat registering for the new crop       MD, CEO and key management per-            non-executive directors vis-à-vis the
insurance cover PMFBY via the              sons in its revised guidelines on corpo-   insurance company shall be disclosed
Gujarat state portal.                      rate governance.                           in the annual report," IRDAI said.

Under the Pradhan Mantri Fasal             "These (revised) guidelines are appli-     Financial performance including
Bima Yojana (PMFBY) launched this          cable from FY 2016-17," it said.           growth rate and current financial po-
year, farmers' premium has been                                                       sition of the insurer should also be dis-
kept lower between 1.5-2% for              Though insurance companies disclose the    closed, it said. The new guidelines are,
foodgrains and oilseed crops and up        remuneration of MDs and CEOs in their      however, not applicable for reinsur-
to 5% for horticultural and cotton         annual reports, they do not contain de-    ance companies and branches of for-
crops. There is no cap on the pre-         tails on the pay of key officials such as  eign reinsurers in India.
mium.
                                           NIC arranging for maiden share sale
"Farmers in drought-hit states have
taken crop insurance seriously this        Public sector National Insurance Company is gearing up for its maiden share
time. More than 50,000 farmers             sale either through strategic divestment or an IPO. "NIC is owned fully by the
have so far enroled for PMFBY for          government. We are gearing up for a possible strategic divestment by the gov-
the 2016-17 kharif season in Gujarat       ernment or an IPO.
via the state portal on crop insur-
ance," a senior Agriculture Ministry       It is a decision which will be taken by the government," company CMD K. Sanath
official told.                             Kumar said. The company requires capital for future and also for meeting the
                                           solvency requirements according to IRDAI guidelines, he said. The stake sale
Gujarat is the only state at present       process would possibly start soon and the entire exercise was expected to be
which is enrolling farmers under the       completed this financial year.
scheme strictly through its e-portal.
In other states including Uttar            Ships plying in Indian ports will not pay additional
Pradesh, farmers are being regis-          premiums
tered by concerned agencies includ-
ing banks, Primary Agricultural            Ships entering or leaving Indian ports are not required to pay a piracy-related
Credit Society (PACS).                                            additional insurance premium now, a move which will help
                                                                  thousands of the vessels.
"So, the exact number of farmers
registered for the scheme both                                    The development has come after seas close to the country's
online and through other ways                                     western coast were removed from the list of the High Risk
would be known later. Once the                                    Areas (HRA) for piracy. About 22,000 ships that called on In-
banks upload the details of insured                               dian ports between 2010 and 2015 paid an estimated addi-
farmers on the central crop insur-         tional war risk premium (AWRP) of about Rs 8,500 crore.
ance scheme portal, it will be known
to all stakeholders," he added.            "Ministry of Shipping took up the issue of redrawing of the High Risk Area (HRA)
                                           Line back to 65 Degrees E (from 78 deg E) in the International Maritime Orga-
                                           nization and as a result the HRA was redrawn at 65 deg E," the ministry said in
                                           a statement. "Thereby, the ships coming to or leaving Indian ports do not have
                                           to pay AWRP now," the statement said.

6 The Insurance Times, July 2016
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