The announcement by the Finance ministry in Budget to withdraw tax benefits from life insurance policies for low premium to sum assured ratio cases has gotten the entire life insurance industry worried. Now, the Insurance Regulatory and Development Authority (IRDA) has requested the finance ministry to revisit this decision and continue some of the tax benefits in life insurance policies.

The finance ministry has levied a rule that a policyholder will be able to avail tax benefits under...  Read More »

On 16th April 2012, The Insurance Regulatory and Development Authority (IRDA) released an exposure draft of regulations for standard proposal form in life insurance. In continuation to prescribing standards for Needs Analysis in Life Insurance, the IRDA has now proposed a standard proposal form for individual policies in life insurance that shall have a section on Needs Analysis.

The regulator mentioned that it is not being prescriptive about any particular matrix or model but the idea is to...  Read More »

Max New York Life Insurance Company finds a new foreign promoter when New York Life exited the life insurance company by selling its 26% stake to Mitsui Sumitomo for around Rs. 2,730 crores.

A simple calculation – if 26% is equal to Rs. 2,730 crores, then the life insurance company is valued at Rs. 10,507 crores. This is a healthy valuation for the 10 year old life insurance  venture. This is by far the second highest valuation received so far by a life insurance company in India, barring...  Read More »

Many life insurance companies may not want to talk about their business performance of 2011-12 but the regulator has checked that the drop in business has been only marginal as compared to the previous financial year, i.e.2010-11. The IRDA Chairman, Mr. J Harinarayan stated that the decline in the overall life insurance business may be about one percent as compared to the year ago. However, he also stated that the decline in first year premium collection dropped by 14%.

The life insurance...  Read More »

The Life Insurance industry may be going through a bumpy ride but some life insurers seem to be doing just fine. Some of the policy changes rolled out by the IRDA and the recent changes announced in the Budget 2012-13 have affected the growth of the life insurance industry. But a couple of companies such as IndiaFirst Life and Star Union Dai-ichi are showing healthy growth and outperforming their own projections.

Few days ago, a senior official of IndiaFirst said that the life insurance...  Read More »

The Insurance Regulatory and Development Authority (IRDA) issued a circular on Friday, 30th March 2012 asking life insurance companies to declare the Net Asset Value (NAV) for all applications that will be accepted on 31st March 2012.

Since 31st March 2012 is a Saturday, the regulator wanted to convey to the insurers that they can consider it as a working day and declare the NAVs.

Net asset value (NAV) is a term used to describe the value of assets of an entity less the value of its...  Read More »

There is a lot being written on IRDA’s reluctance to approve new single premium life insurance products. Single premium life insurance products have been selling well with consumers opting for it more for the convenience factor rather than from an insurance coverage angle. From an insurance perspective, single premium policies definitely do not serve the purpose. Actually it does not serve the purpose from an investment angle also when compared to regular premium policies.

The...  Read More »

 The Insurance Regulator in India IRDA feels that life insurance policies should be sold based on the customer’s requirement and suitability. In order to achieve this, the regulator has suggested use of a Suitability Index or Prospect Product Matrix which should be used by the insurers to check suitability before making a life insurance sale.

Based on the inputs received from the customer by the insurer or its distribution partners, a suitable product can be recommended to the customer. This...  Read More »

IRDA said that there has been negligence on the part of MetLife Insurance Company and has imposed a fine of Rs 2 lakhs to be paid within 15 days.

The insurance regulator received a complaint from Suresh Chukkapalli regarding non-receipt of life insurance policy from MetLife even after a lapse of 11 months.

In its defense, MetLife Insurance Company officials told IRDA, “The time taken to refund the proposal deposit was due to review of the underwriting decision on the request of the...  Read More »