VOLUME 1 ISSUE 9

OCTOBER, 2013

Don't deny claims of HIV infected policy holders: IRDA

Cashless Mediclaim to be back in top hospitals

Now, swipe for medical insurance claims

Insurance repositories can help industry save over Rs 2,000 crore a year

Apollo Munich ties up with Canara Bank for sale of its policies

More time to implement life insurance norms

Maharashtra to implement pilot weather based crop insurance scheme for Rabi crops

Is the free-look period applicable only for life insurance?

D&O liability insurance gains currency with passage of Cos Act

GIC Re to issue catastrophe bonds in international market

Initiative from

1. Cashless Mediclaim to be back in top private hospitals that had pulled out of the preferred provider network (PPN) a year ago as the cap on treatment cost set by insurance companies seemed unviable to them. 2. The move will benefit more than 70% of medical insurance policyholders in the state who have a policy from one of the four public sector insurers — National Insurance Company, New India Assurance , United India Insurance and Oriental Insurance.

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1. The entry of Medicash (A 12 inch sized instrument akin to the machines) will be beneficial if it gathers acceptability. But those hospitals, which colluded with so- called third party agents to inflate medical bills and earned easy money, may be the losers. 2. A Medicash card can be swiped at the point-of-sale terminal. Like credit card payments, policyholders will get a cashless authorization slip. 3. Post this, the insurance company calls up the customer and at the time of discharge, shares communication regarding the approved amount through SMS and email.

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1. An insurance repository is like a demat account for insurance policies. 2. It costs a life insurance company roughly Rs 600 a year to service a physical policy and Rs 80-100 a year to service e-insurance account in electronic form. 3. The saving of Rs 500 per policy means that the industry stands to cut costs by Rs 2,000 crore on the estimated 4 crore policies it issues every year. 4. Health, motor insurance policies too may go paperless from January. 5. There’s no risk of losing the physical document. Also, policyholders can pay their premiums online and renew policies through the portals. 6. IRDA permitted five companies to act as insurance repositories — NSDL Database Management, SHCIL

Projects, Central Insurance Repository, Karvy Insurance Repository and CAMS Repository Services. GO TOP

1. IRDA has asked life insurers not to reject any claim of persons infected by HIV during the course of policy. 2. IRDA said insurers may offer products to people such as a. (PLHA) people living with HIV/AIDS as one of the critical illness, providing a lump sum on becoming HIV positive b. Conversion of lump sum amount into annuity for life in the event of insured becoming HIV positive during the term of contract. 3. The circular will come into effect from April 1, 2014.

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1. Standalone health insurer, Apollo Munich Health Insurance tied up with state-owned Canara Bank to distribute its products from the bank's branches. 2. Under the arrangement, the bank will act as a corporate agent for selling the company's products. 3. Canara Bank with 5 crore customers has over 4,200 branches spread across the country.

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1. Irda has extended the deadline for implementation of new individual product regulations for the life insurance industry by three months to December 31 to enable insurers to cope with the system readiness. 2. Insurance products with highest NAV (net asset value) guarantee and with fund level guarantees and which are linked to any external index have to be withdrawn immediately and will not be sold from October 1. 3. All the existing group policies and all the existing individual products not in conformity with the provisions of this regulation shall be withdrawn from August 1, 2013 and January 1, 2014, respectively.

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1. Maharashtra government will for the first time implement a pilot project on weather-based crop insurance scheme for the Rabi crops of wheat, gram and jowar covering damage caused by changes in temperature, humidity and untimely rainfall. 2. The farmers will be eligible to get compensation up to Rs 25,000/hectare for wheat, jowar and gram. 3. It will be mandatory for farmers who have availed crop loan.

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1. No, even health policies will now get a window of 15 days from the time you receive your policy, to return it if you do not want it, provided it is a fresh policy and policy is minimum of one year tenure. 2. In this case, the insurer will return the premium paid. However, costs like administration and medical examination will be deducted from the premium to be returned. 3. It will be applicable to both indemnity and defined benefit plans. 4. The former one reimburses you the cost of hospitalization up to the sum insured, whereas a defined benefit policy pays a lump sum on diagnosis of specified illness. 5. Even a personal accident cover will now allow a free-look period.

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1. The approval of the new Companies Act by the Parliament has once again brought the focus back on the Directors and Officers (D&O) Liability Insurance. 2. a) The Companies Act clearly lays down the duties and responsibilities of directors and senior officers and thereby holds them accountable directly for the same. b) It also proposes to set up a National Companies Law Tribunal (NCLT) where the aggrieved party can file their cases against the individual and seek compensation for damages. The NCLT would look into early resolution of all issues relating to mismanagement and other company-related matters. c) The Companies Act also provides a provision for class action suit where a person or a group of people, who represent the interest of a larger group, can file a suit before the court since they have common grievance. The provision which was available to investors in the US was not available to Indian investors and which is why Indian investors of erstwhile Satyam Computer Services have not been able to get their due even as the investors in the US have managed to get the same as they filed a class action suit. 3. These three changes in the Companies Act have made it more important for companies to take cover under the D&O liability which is a kind of insurance that covers liability of senior executives that arises due to a wrongful act of the person in managerial capacity. 4. If a company takes such an insurance policy then in case there is any court proceeding against a director or a senior official, then all legal expenses are recoverable under the D&O policy and are payable in advance of the final judgment. 5. The policy also provides protection for claims brought against the directors, officers and employees for breach of duty, neglect, misstatements or errors in their managerial capacity.

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1. GIC Re will be the first Indian company to float catastrophe bonds in the international market as it looks to trim recent losses and raise money at a lower rate. 2. The country's national reinsurer will issue catastrophe bonds in the United States to cover risks arising out of natural disasters like earthquakes, floods and tsunami. 3. The bonds are generally priced 200 basis points above the 10-year US treasury yield. The price offered on Cat bonds is higher than corporate bonds as they carry junk status and investors run the risk of losing their entire sum. 4. If there's a catastrophe, the money will be used to pay for the claim. But there's no room for such products in India. "Indian market has not tasted this kind of a product. 5. According to the Swiss Re Cat Bond Price Return Index, Cat bonds have returned 9.09% in first nine months till September 30, this year. Large global reinsurance companies like AXA, Swiss Re issue Cat bonds to reinsure against catastrophes. Also, companies package various catastrophic risks and some even design products based on specific perils like storm, earthquake and flood.

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