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The Indian government has proposed that insurers will be held responsible for all the acts and omissions of their agents, and will have to face a penalty of up to INR10 million (US$164,000) for any violation.

The proposed measure is in new provisions inserted into an amendment Bill to revise the insurance law that would also raise the foreign investment limit in the insurance sector from 26% to 49%, reported the Times of India.

Many policyholders complain that the policy sold to them is not what was promised to them at the time of purchase. In many such instances, insurance companies would heap the blame on agents. Although there are provisions such as a free look-in period, and cancellation of the policy within 15 days, if the buyer is not satisfied, most consumers only realise the flaws in their policies much later.

The Bill, which proposes around 100 amendments to the insurance law, also seeks to allow an insurance company an option to contest any order passed by IRDa under section 33 of the Insurance Act in the Securities Appellate Tribunal. Earlier, insurance companies could not contest the order in any court. Section 33 deals with powers of investigation and inspection by the Insurance Regulatory and Development Authority (IRDA) and the subsequent penalising of insurers for any wrongdoing.

The government is slated to move the Bill, which has been delayed since 2008, in the upper house of Parliament today. Once it is passed by both Houses of Parliament and gets the President’s nod, it will become law.

Meanwhile, the All India Insurance Employees’ Association has raised serious objections to the government’s attempt to increase the foreign direct investment ceiling in the insurance sector, claiming that the move is against national interests.

AIIEA vice-president K.Venugopal said: “Since the crisis in 2008 the industrialised nations are experiencing stagnation in premium income. Therefore, it is natural for multinational companies to demand further opening up of the insurance sector in India, which, at the moment, is very promising.

“There may be people who argue that we will still have a majority 51% stake in the insurance sector. But, if an Indian stakeholder wants to sell around 5% of his stake to another Indian, then it’s the foreigners who will become the majority with a 49% share as two Indians will have a 46% and 5% stake in the company,” he said.

General insurance companies in India are giving a makeover to their health insurance plans by covering more than just hospitalisation expenses. They have designed comprehensive policies that will cover, besides hospitalisation reimbursement, pre-hospitalisation expenses such as out-patient department and wellness services.

The insurers are also providing additional features in health insurance policies such as worldwide emergency cover, disease-specific covers, value-added services in the form of discounts, health maintenance benefits and charges incurred in second-opinion consultations, reported the Hindu Business Line.

Mr Tapan Singhel, Managing Director and CEO of Bajaj Allianz General Insurance, said that conventional health insurance policies, especially the hospitalisation reimbursement category that exists in the market today, have been restrictive in terms of coverage.

After assessing the latent demand for all-inclusive health insurance covers, Bajaj Allianz recently launched a comprehensive health insurance plan providing coverage for hospitalisation treatment and also maternity, OPD and dental treatment.

CIGNA TTK, the newest standalone health insurer in India, plans to leverage the global health service expertise of US-based Cigna to focus on wellness-oriented health insurance products to differentiate its services, said Mr Sandeep Patel, the company’s Managing Director and CEO.

Other insurers have launched specialised disease-centric policies which will cover pre-existing diseases without any waiting period. For instance, Star Health Insurance’s Diabetes Safe Plan, covers complications from diabetes from Day One. Other health insurance policies in the market today generally have a waiting period of four years for covering pre-existing illnesses.

The health insurance sector in India is intensely competitive with 23 general insurance companies and five standalone health insurance companies.

General insurers have proposed to the government to allow them to issue compulsory third-party (CTP) motor cover, with limited liability. For the high-risk commercial vehicle segment, an option for additional liability limit covers is proposed, which will provide a sum over and above the basic motor policy.

Led by the industry body, the General Insurance Council, non-life insurers have sent a proposal to the Road Transport and Highways Ministry to consider TP covers with fixed limits, similar to the pre-determined liability limits for air and train accidents, reported Business Standard.

The implementation of this model will need an amendment to the Motor Vehicles Act which currently does not stipulate any limit on the liability of vehicle owners. Non-life insurers say due to this law, an increase in claim awards by courts is seen every year.

The implementation of this model will need an amendment to the Motor Vehicles Act which currently does not stipulate any limit on the liability of vehicle owners. Non-life insurers say due to this law, an increase in claim awards by courts is seen every year.

In the financial year ended 31 March 2013, general insurance companies incurred total claims of INRR176 billion (US$2.93 billion) in the motor segment, according to data released by the Insurance Information Bureau of India. “The commercial vehicle segment sees the highest losses and the most claims. If this segment’s TP liability is limited, it could lead to lower premiums for other categories,” said the chief executive of a small private general insurer.

In 2012-13, the total premium collected in the motor business segment stood at INR284.6 billion. Of the total claims, TP claims amounted to INR91.8 billion while ‘own-damage’ claims stood at INR84.2 billion.

The chairman of India’s insurance regulator has expressed the hope that a proposed hike in foreign holdings in insurance companies, when effected, would lead to initial public offerings of the companies.

The chairman of the Insurance Regulatory and Development Authority (IRDA), Mr T S Vijayan, told reporters: “Now I expect insurance companies to get listed.” He said that  details would be known once the Insurance (Amendment) Bill, that would effect the increase in the ceiling on foreign holdings in insurance companies from 26% to 49%, is passed by Parliament, reported the Press Trust of India.

The Indian Cabinet cleared the Bill last Thursday with the provision that management control of insurance companies will be in the hands of Indian nationals. Under the proposal, all investments in insurance companies beyond 26% will have to be approved by the Foreign Investment Promotion Board.

The next step is to table the amendment Bill before Parliament. Industry stakeholders are taking a wait-and-see approach for more details in the Bill.

Private-sector general insurers increased their combined market share to 44% in the financial year ended 31 March 2014 despite the depressed economic scenario, at the cost of the state-owned insurers, according to data from the Insurance Regulatory and Development Authority. Their market share stood at 42.8% the previous year in terms of gross premiums.

Some of the private sector non-life insurers, which gained market share during the year ended 31 March 2014 included Bajaj Allianz, HDFC Ergo, SBI General, Reliance General and Bharti Axa, reported the Press Trust of India.

However, private-sector leader ICICI Lombard’s market share in FY2013-14 was flat at 8.8% compared to 8.9% the previous year. Private-sector general insurers that lost ground included Royal Sundaram, Tata AIG, Universal Sompo and Shriram General.

Among public-sector players, industry leader New India Assurance increased market share to 14.9% in FY2013-14 from 14.5% the previous year, while United India Insurance’s market share fell to 12.5% from 13.4%.

The new Indian government plans to implement a universal health insurance programme for the country – which would be the world’s biggest – and bring about a “complete transformation” of the health sector through research, innovation and the latest technology, according to Health Minister Harsh Vardhan.

”The blueprint of the world’s largest universal health insurance programme is in the process of being sharpened under the Prime Minister’s personal gaze. It is partially inspired by US President Barack Obama’s grand insurance-for-all project, which is popularly known as ‘Obamacare”’, said Mr Vardhan as he read out a speech by Premier Narendra Modi to a gathering of US-based Indian medical professionals in Texas over the weekend.

“It is my firm belief that our focus needs to go beyond health insurance. The way ahead lies in health assurance. We need to focus on preventive health care where public participation has a major role to play,” the Prime Minister said in the speech. Mr Modi won the recent general election and was sworn into office last month.

“The Prime Minister has authorised me to come up with a brand new policy soon,” the Press Trust of India reported, citing Mr Vardhan.

“ObamaCare” or the Patient Protection and Affordable Care Act, was signed into law in 2010. It aims to increase medical insurance coverage, improve the quality of healthcare and reduce healthcare costs in the US.

The Indian insurance regulator, seeking to protect consumer interests, has made it mandatory for agents to provide full details in a transparent manner when they attempt to persuade policyholders to shift to another life insurance company.

The Insurance Regulatory and Development Authority (IRDA) said in an exposure draft  that “no life insurance agent, insurance intermediary or an insurer is permitted to replace a life insurance policy, except, if it is in the interest of the policyholder”.  The move is also to  discourage intermediaries from persuading customers into lapsing on or surrendering an existing life insurance policy “with the intent of canvassing or soliciting a new life insurance policy on the same life”.

The guidelines envisage the full disclosure and transparency of information to the policyholder to avoid possible misrepresentation as to the financial consequences of replacing an existing life insurance policy, the Press Trust of India reported, citing IRDA.

“It is also envisaged that these guidelines would encourage fair market conduct and fair business practices amongst life insurers and insurance intermediaries,” the regulator added.

The draft said: “Every insurance intermediary or an individual agent would make every reasonable effort to keep in force the existing life insurance policy.”

Replacement, if required, would be subject to certain conditions, including obtaining written consent from the prospect to replace existing policies. There is also a need to obtain the particulars of all existing life insurance contracts of the prospect, and details of those policies that are proposed to be replaced.

Agents also have to notify the existing insurer whose policies are proposed to be replaced along with the particulars of the policies. The agents also have to enclose a copy of the consent of the prospect 15 days prior to submitting new proposal forms, said IRDA. In addition, they have to submit the proposal form to the new insurer whose policies are to replace existing life policies after the expiry of 15 days from the date of notifying the old insurer.

The Japanese and South Korean football teams, the only Asian teams among 32 teams worldwide taking part in the FIFA World Cup tournament in Brazil, have a total insurable value of GBP158 million (US$268 million), according to Lloyd’s.

The Japanese team, which ranks higher in the World FIFA rankings, has a total insurable value of GBP92.8 million, compared to the South Korean team’s GBP65.2 million. The average player value for the Japanese team is GBP4 million compared to GBP2.8 million for the South Korean footballers.

Lloyd’s has predicted that based on insurable value, Germany has the most expensive team competing in the 2014 FIFA World Cup and therefore should come away with the prize in Rio. Its total insurable value is GBP641.2 million.

A snapshot of the research shows that after Germany, the three most expensive teams in terms of insurable value are Spain, England and Brazil in descending order. The total insurable value for the Spanish team is GBP590.1 million; England, GBP550.1 million and Brazil, GBP448.3 million.

Mr Marco Castro from Lloyd’s Brazil said: “It is incredible to see how much some of the teams playing in Rio are worth – the top three, Germany, Spain and England – are worth more than GBP1.7 billion collectively. This is more than the bottom 20 teams combined. The total collective value of all 32 teams is estimated at GBP6.2 billion.

Lloyd’s released the research with the Centre for Economics and Business Research (CEBR) that ranks each team in the FIFA World Cup based on the collective insurable value of each country’s players.
CEBR used players’ wages and endorsement incomes, alongside a collection of additional indicators, to construct an economic model which estimates players’ incomes until retirement. These projections formed the basis for assessing insurable values by player age, playing position and nationality.

The research was supported by Sporting Intelligence, which provided anonymised footballer salary data for each of the 32 teams participating in the 2014 FIFA World Cup, after the finalisation of their 23-man squads.

Lloyd’s has predicted a Germany v Spain final. Spain, which is the defending champion, lost 5-1 to Holland last Friday. However, Spain’s chances of winning the World Cup have not been written off yet. The World Cup competition, which began on 12 June, ends on 13 July.

Health insurers in India are seeking to popularise recharge health option plans in a bid to increase sales.

Under a recharge health plan, if the person insured exhausts his or her total sum insured during a particular year, the plan allows reinstatement of the sum insured. The reinstated plan can be utilised in for a small charge. However, insurers add exceptions to recharge plans like prohibiting policyholders from carrying forward the reinstated sum insured or claiming benefits on account of a previous illness for which the sum insured had been exhausted, reported the Times of India.

“We have introduced the recharge benefit in our newly launched Healthcare Supreme Plan. The advantage for the insured is that he or she has some cover even if the sum insured gets exhausted during a particular year. Otherwise, he or she would have to wait till the next year,” Renuka Kanvinde, associate VP, health insurance, Bajaj Allianz General Insurance said.

Other insurers are making their recharge plans more attractive. Apollo Munich’s Optima Restore benefit launched last year has a multiplier benefit under which the company increases the coverage by 50% the following year and doubles it the year after if customers do not draw on their plans. “Optima Restore has evolved as the fastest growing product in our portfolio, and last year it accounted for about 30% of our total retail book,” Mr Antony Jacob, CEO of Apollo Munich Health Insurance, said.

Insurers state that such plans can turn out to be economical in the face of rising medical inflation which currently stands at 15%.

Cigna TTK Health Insurance has a restoration benefit under all its plans. “Customers looking for sufficient cover at reasonable pricing will go for policies with a recharge option.

“A restore/recharge option makes the health cover more comprehensive especially when you do not have any back up health cover. Persons who can bear some amount of their healthcare costs but are looking to fund the additional risks through an insurance plan will opt for top-up/deductible plans,” Mr Sandeep Patel, Managing Director & CEO of Cigna TTK Health Insurance, said.

The Agriculture Ministry will revamp the crop insurance scheme with focus on increasing crop-based income for farmers rather than insuring them against crop losses.

This means that the government has decided to immediately stop the current crop insurance scheme – the Modified National Agricultural Insurance Scheme, launched only last year. According to official sources, this existing scheme requires the government, farmers and the private companies to pay the money for insurance but the system is too complicated and difficult for the farmers to get an income in case of crop failure, reported Business Standard.

The major issue with the scheme is that farmers get the insurance money if there is a total crop loss. If there is a crop loss for a single farmer getting the money is not feasible most of the time, officials said.”

The existing scheme does not treat an individual farmer as a unit when providing insurance compensation. It treats a village or a group of villages as a unit in the compensation formula and it invariably tends to benefit big and medium farmers.

Officials say that the revamp will focus on simplifying the procedure for farmers to receive the money in the event of the crop failure of a single farmer.  All farmers, including sharecroppers, tenant farmers, farmers enrolled in contract farming, groups of farmers serviced by fertilizer companies, pesticide firms, crop growers, and self help groups are expected  to be eligible for insurance cover. It will be also made available for food crops, oilseeds and annual commercial/ horticultural crops.

Agriculture Minister Radha Mohan Singh said that the change in the crop insurance plan will  take into account the average income of farmers in the last 5-7 years in devising a compensation scheme. The central government will bear the burden of the premium for insurance of average income, said Mr Singh adding: “Farmers will take interest in agriculture only when their investment is guaranteed.