Insurance Institute of India G Block, Plot No. C - 46, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051. www.insuranceinstituteofindia.com 19th – 25th April 2013 Insunews INSIDE THIS ISSUE: Gujarat, Madhya Pradesh, Tripura Nagaland, Assam, Mizoram, Meghalaya, and Orissa,” he said. News Categories Page Insurance Industry 1 Source – IRDA Regulation 1 http://www.thehindubusinessline.com/news/increasing-fdi-in- insurance-is-a-priority-for-upa- Life Insurance 2 chidambaram/article4636418.ece Health Insurance 3 General Insurance 4 'Size of insurance firm vital to fix exposure cap' - IRDA Circular 5 Business Standard Global News 5 Insurance Regulatory and Development Authority (Irda) Chairman T S Vijayan today said while dealing with individual insurance companies on issues such as fixing the cap on Insurance Industry investing in a single entity, the size of assets would be considered. Increasing FDI in insurance is a priority for UPA: Chidambaram - The Hindu Business Line "The regulator is here to provide a level playing field for all companies. But that doesn't mean a Rs 1,000-crore company Increasing foreign direct investment in the insurance sector is has to be treated on a par with a company with a Rs 2.5-lakh- a top priority for the ruling UPA, Finance Minister P. crore asset base, on every issue," Vijayan said, responding to a Chidambaram said today, hoping that a Bill to address the question on the 'differential treatment' to Life Insurance issue will be passed in the upcoming Parliament session. Corporation of India (LIC), which he headed earlier. Last year, the Union finance ministry had allowed LIC equity exposure of Responding to questions at the Peterson Institute, up to 30 per cent in a single company. Vijayan's predecessor at Chidambaram appreciated the efforts of the insurance Irda, J Hari Narayan, had questioned the move. industry in reaching out to the Opposition parties and hoped that this would help the political parties understand issues Vijayan said before he had assumed office on February 21, and thus help in the passage of the Bill. Hari Narayan had already addressed the issue by allowing different threshold limits to insurers, based on their asset “Parliament opens on April 22. It (Insurance FDI) is right there bases. He said he favoured a thorough debate on the Indian at the top of the agenda. We are stuck on one clause, FDI cap, Financial Code, which proposed a unified regulatory whether it should be 26 or raised to 49. If the principle mechanism, instead of seven different regulators for different opposition party comes around, the Bill will be passed,” segments of the financial sector. He added the proposed Chidambaram said. financial code would eliminate the grey areas that existed in the Indian financial sector. “I am keeping my fingers crossed. I sincerely hope that the efforts of the insurance industry in speaking to the Opposition Earlier, at a seminar on the recommendations of the Financial are helpful and I can pass the Bill,” Chidambaram said. Noting Sector Legislative Reforms Commission, Vijayan said efforts that without growth there will be neither inclusiveness nor should be made to bring in the proposed financial code within development, he said, “As long as the Congress is at the helm a meaningful time frame. of affairs, I believe that they will accept growth is necessary in order to lead to inclusive development.“ Source – http://www.business-standard.com/article/finance/size-of- “Once you accept that paradigm, you have to accept fiscal insurance-firm-vital-to-fix-exposure-cap-113042000605_1.html deficit, you have to contain inflation, you have to contain expenditure, you have to balance your books to a large extent,” Chidambaram said. Responding to questions, IRDA Regulation Chidambaram said most State Governments have now realised that implementation of the programmes is the key. More debate needed on financial code, says IRDA chief - The Hindu Business Line “Until about 10 years ago, most State Governments were not re-elected. If you were in office for five years, you were more There is a need for a debate on the Indian Financial Code or less certain to be defeated in the next election. That seems (IFC), according to T. S. Vijayan, Chairman, Insurance to have changed in India in the last 10 years,” he said. Regulatory and Development Authority (IRDA). “Incumbent Governments are getting re-elected. The Speaking at a seminar on IFC organised by the Institute of Government at the Centre got re-elected in 2009 with a larger Company Secretaries of India (ICSI) here on Saturday, Vijayan number. Since then Governments have been re-elected in Insurance Institute of India said a standardisation of intermediation should be brought in by the proposed financial code. Life Insurance IFC is a draft bill recommended by the Financial Sector Legislative Reforms Commission (FSLRC) in its report to the Life insurers gang up against phony investment Government. It has recommended that the existing regulators schemes - Financial Chronicle — SEBI, FMC, IRDA and PFRDA — should be merged into a new unified agency. Amid a continuing Sebi probe into a phony investment syndicate active in the national capital region, six private life “If the financial code comes into force, Hyderabad will lose its insurers have joined hands to fight the menace of misselling of only regulator and IRDA would not be there,” Vijayan, who insurance products through spurious calls made by fraudulent recently took over IRDA chief, said. agents. Vijayan said there should be no ambiguity in various Capital markets regulator Sebi earlier this month unearthed a recommendations of the FSLRC, such as principle-based syndicate of fraudulent agents operating in the national regulation and modalities on capital flows. C. K. G. Nair, capital, wherein a large number of people could have been Secretary, FSLRC said the proposed code is for ‘tomorrow’s defrauded in the name of mutual fund and insurance products India’ as the economy is expected to touch $15 trillion by 2030 purchased by their deceased family members. Sebi widened from the current $2 trillion. its probe after preliminary investigations, conducted with the assistance of the economic offences wing of Delhi Police, S. N. Ananthasubramanian, President, ICSI said the seminar indicated an organised attempt by several people to defraud was the first initiative of its kind to debate the financial code. the gullible investors. Source – As Sebi is continuing its probe, six private insurers – Reliance http://www.thehindubusinessline.com/industry-and- Life Insurance, ICICI Pru, HDFC Life, Birla Sun Life, SBI Life and Aegon Religare – have formally filed a complaint with the economy/banking/more-debate-needed-on-financial-code-says- economic offences wing (EOW), seeking its help to act against irda-chief/article4637267.ece the spurious callers, sources said. In their complaints with the EOW, the private life insurance companies have sought action Money-laundering probe: IRDA report likely in a week - against offenders who make spurious calls to customers with The Hindu Business Line false promises on loans or other investment products to dupe The Insurance Regulatory and Development Authority (IRDA) them. is likely to complete investigation into the alleged money- laundering transactions of insurers within a week. Their modus operandi typically involves the customers being asked to surrender their existing insurance policies and shift “Our inspections teams have been deputed to some insurance to some new products for better returns. The agents, in the companies and the process is on. We may have a report ready process, earn hefty commissions or at times dupe the within a week on the issue,” T. S. Vijayan, Chairman, IRDA, told investors of their entire investment values. When contacted, newspersons on the sidelines of a seminar held here. Reliance Life Insurance confirmed the development and said that the insurance companies have given presentations to It may be recalled that online magazine Cobrapost.com caught EOW about the modus operandi of fake callers. As per their some officials of ICICI Bank, HDFC Bank and Axis Bank on presentations, these fraudsters are operating from make-shift camera allegedly offering to convert black money into call centres in the Delhi-NCR. legitimate money. The Reserve Bank of India had initiated an enquiry into the matter. The IRDA had also taken up the The preliminary investigations by the insurers also found that matter and major insurers, HDFC Life, ICCI Prudential and some of these persons were previously associated with Max Life, have come under its scanner. insurance companies, directly or indirectly. Typically, these persons use prepaid mobile numbers or calling cards to Last month, it asked the CEOs of these insurance firms to contact gullible investors, while some people operate as field submit relevant data for initiating appropriate action. When staff to collect documents and cheques. Sensing a large-scale asked whether there would be any review of investment fraud, insurers and their regulator Irda have also begun norms of insurers in a single entity, including the Life sensitising the public on the matter though emails and SMSes Insurance Corporation of India, Vijayan, who headed LIC on a regular basis. earlier, said “there should be level-playing field.” According to Reliance Life Insurance CEO Anup Rau, there are The variations in the assets should be taken into consideration strict compliance policy and processes to help identify and act while fixing the caps, he said, adding that the regulator had against spurious callers trying to mislead customers. “We have revised the investment norms upwards in February this year. been regularly alerting our customers through SMS and emails According to the new norms, life insurers can invest up to 15 against falling prey to any person or entity making superficial per cent in a single entity.