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Archive for March, 2023

IRDAI provides Insurers flexibility for expenses management with new payment rules on commission

Posted on: March 30th, 2023 by hema kashyap No Comments

The Indian insurance regulator has allowed Insurers an overall limit on expenses of management (EOM) by removing the individual cap on payments of commission for insurance products. As per the IRDAI (payment of commission) regulations, all life and non-life insurers (general and standalone health insurers) will be able to manage their expenses within the overall limits defined by their gross written premium.

Becoming operational with effect from 1st April 2023, regulations will be reviewed once every three years. It will help insurers to utilize their resources in an optimal manner and extend benefits to the policyholders. Insurance agents will be encouraged to explain policy features and sell insurance products to consumers, increasing insurance penetration in India.

Premium rates for fire insurance now linked with claims record by Insurers

Posted on: March 21st, 2023 by hema kashyap No Comments

Non-life insurance companies in India are linking the premium rates for fire insurance policies to the claims record, doubling the insurance price for those with reported claims of more than three times the premium paid. This linkage will enable companies to offer discounts to customers with good track record, as claims in property insurance are less frequent.

Industry experts are of the opinion that it is due to the IRDAI’s directive to not to treat the premium rates published by the insurance information bureau as minimum rates.

India: Public Liability Insurance is the way to be

Posted on: March 16th, 2023 by hema kashyap No Comments

Public liability insurance provides cover for any personal injury or damage to the third party which can be attributed to the policyholder’s business operations. It covers damage caused to the general public, customers, or sub-contractor within business premises or claims of damage to others’ property involving the business. The aim of public liability insurance is to avoid costly litigations and stop insurmountable losses.

As per the report on Public Liability Insurance in India, India’s economic development and industrial growth will necessitate the pursuit of public liability insurance. This report provides a holistic overview of the rules and regulations governing liability insurance, its operability, and working both for disastrous public tragedies like 1984 Bhopal gas disaster and commercial liability of global organizations.

There is a need for non-life insurers to spread awareness of liability insurance and the inherent risks involved in any business activity. Develop public liability risk covers in line with market expectations and which aspect of the risk can be covered under such insurance. A high degree of focus is required to improve product coverage, claim conditions, and relief options for victims to improve the low penetration of liability insurance in India.
The report proposes • to make public liability insurance mandatory for all businesses and to fast-track justice and compensation for victims of non-industrial accidents

Turkey-Syria earthquake – Insurable losses exceed $ 4 bn

Posted on: March 15th, 2023 by hema kashyap No Comments

A high-intensity earthquake measuring 7.8 on the Richter scale devastated parts of Turkey and Syria on 6th February 2023. More than 33,000 people have died and innumerable losses on the economic front. Not just overall economic losses, it is very difficult to predict the economic losses which could have been covered with insurance, as on ground situation becomes clear. This earthquake has caused an estimated insurable economic loss of more than $ 4 bn, impacting the insurance sector.

Many structures and buildings in the region have been completely destroyed, with a good size of the population residing in temporary shelters or buildings prone to earthquake tremors. The Turkish Catastrophe Insurance Pool (TCIP) covers only residential buildings in the urban region, excluding commercial properties and loss of life.
Despite mandatory earthquake insurance cover, many residential properties are not insured, due to affordability. Presently, around 10.8 mn (53.90%) of about 20 mn residential properties in Turkey are covered for earthquake risk.
With insurable economic losses from the Turkey-Syria earthquake touching $ 4 bn or even more, the reinsurance part of TCIP could provide a little over $ 2 bn protection.

Further, local and international commercial insurers which provide insurance to industrial clients, for damaged factories and infrastructure like airports and ports are also majorly reinsured. The extent of claims is estimated to be insignificant for the global reinsurance market.

IRDAI reinstructs insurers to provide health cover to vulnerable persons

Posted on: March 2nd, 2023 by hema kashyap No Comments

India’s Insurance regulator has instructed all general and health insurers to offer specialized cover for persons with disabilities (PWD), HIV/AIDS patients, and those suffering from mental illness.

A circular dated 27 February 2023 mandates insurers to have a board-approved underwriting policy so that the above-mentioned categories of people are not denied insurance access on account of the above-stated disabilities and/or illnesses.

All general and standalone health insurers must launch and offer such products immediately. Insurers may determine the price of the product in compliance with health insurance regulations, for a renewable policy tenure of 1 year.

This is in response to a Delhi High Court hearing in December 2022 on the plight of affected people to advise insurers about designing and offering insurance products for persons suffering from disabilities, HIV/AIDS, mental illnesses, as well as for transgender people, and submit a status report before 17 March 2023.

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