Page 15 - The Insurance Times October 2024

focus on providing life insurance million in taxes, penalties, and interest. holds an 80% market share. The
solutions to international clients The fraudulent invoices enabled Aviva company's group premiums surged by
through partner banks and broker to claim undue tax credits, evading an 46% to Rs. 13,599 crore in August.
partners. A specially designed ULIP estimated $5.2 million in taxes. A Among private sector insurers, SBI Life
product, the IndiaFirst Life Wealth spokesperson for Aviva declined to Insurance saw a 13.46% decline in
Wise plan, will cater to global Indians comment on the ongoing legal premiums, totaling Rs. 2,703.92 crore,
from the GIFT City office. matters.
while ICICI Prudential Life Insurance
recorded a 12.3% growth, reaching Rs.
UK-Based Aviva Faces Life Insurers' New Business 1,509.12 crore. Other major players
Allegations of Tax Evasion Premiums Surge by 22% in such as HDFC Life, Bajaj Allianz Life
Insurance, and Max Life Insurance
in India August
posted growth rates of 3.6%, 2.8%,
British insurer Aviva has been implicated Life insurance companies in India and 16.7%, respectively.
in an Indian tax investigation for experienced a significant boost in new
allegedly circumventing compensation business premiums (NBP) in August, For the April-August period of FY25,
and tax regulations. The Directorate with a year-on-year growth of 21.8%, the total NBP of life insurance
General of GST Intelligence (DGGI) totaling Rs. 32,644.09 crore. This companies reached Rs. 1.54 trillion,
claims that Aviva's Indian arm used fake increase was driven largely by the marking a 20.8% increase compared to
invoices and cash payments to evade state-owned Life Insurance the same period last year. LIC's market
commission caps and taxes. Between Corporation (LIC), which recorded a share stood at 61.7%, up from 58.4%
2017 and 2023, Aviva reportedly paid 35.1% rise in its NBP, amounting to Rs. a year ago, while private insurers'
approximately $26 million to entities 19,309 crore. share declined to 38.2% from 41.6%.
that did not provide the services for Private sector insurers also saw
which they were invoiced. These growth, albeit at a more modest rate J&J Ordered to Pay Rs. 35
payments were allegedly funneled to of 6.7%, bringing their total to Rs. Lakh Compensation to Hip
agents, violating local regulations on
13,335 crore. Growth in individual non- Implant Victim
commissions. single premiums contributed to this
The investigation is part of a broader rise. LIC maintained its dominance in The National Consumer Disputes
probe into over a dozen Indian insurers the market, especially in the group Redressal Commission (NCDRC) has
accused of evading a total of $610 single premium segment, where it ordered Johnson & Johnson to pay Rs.
35 lakh in compensation to Purshottam
Lohia, a Pune businessman, for the pain
Government Plans to Double Coverage Under Key
and suffering caused by a faulty hip
Insurance Schemes implant. The compensation includes an
The central government is considering a proposal to increase coverage under additional Rs. 1 lakh for mental agony.
its flagship life and accident insurance schemes in the run-up to state Johnson & Johnson had already paid
assembly elections. According to sources, the government intends to raise Lohia Rs. 25 lakh, as directed by the
the life cover provided under the Pradhan Mantri Jeevan Jyoti Bima Yojana Delhi High Court, leaving a balance of
(PMJJBY) from the current Rs. 2 lakh to Rs. 5 lakh. PMJJBY, one of the largest Rs. 10 lakh to be paid.
life insurance schemes in India, covers over 200 million subscribers. Lohia's legal battle began in 2006,
Additionally, the government is planning to enhance the coverage under when he had a hip replacement
the Pradhan Mantri Suraksha Bima Yojana (PMSBY) from Rs. 2 lakh to Rs. 5 surgery involving a DePuy ASR XL
lakh in cases of accidental death or disability. As of July 31, the PMSBY had implant manufactured by Johnson &
enrolled 453.6 million subscribers. Johnson's subsidiary, DePuy
Orthopaedics. The company recalled
This initiative is part of the government's broader "insurance for all by 2047" the product globally in 2010 due to its
vision. India's insurance penetration, currently at 4% of GDP, remains below high failure rates, which led to severe
the global average of 6.8%. Increasing coverage under these schemes aims pain and revision surgeries for affected
to address the protection gap in the country, ensuring that insured patients. Lohia underwent a revision
individuals or their dependents can meet financial obligations in the event surgery in 2017 and sought
of death or disability. compensation for his suffering.

14 October 2024 The Insurance Times