Auto insurance is required in almost all states of the United States. If you are looking to buy a new vehicle make sure you fully consider the cost of the auto insurance premium since driving a vehicle without car insurance could lead to suspension or revocation of your license. In some states, some drivers could spend time in jail for driving without auto insurance. The penalties if you are caught without automobile insurance are severe and will cost you a great deal of money.

Finding a cheap auto insurance is not really difficult to find but you will need to do a fair bit of negotiation with the auto insurance agents who will try to sell you the highest priced plans because of profit motives. Beware of car insurance companies who market to people who have a poor credit history. They may give you low car insurance premiums but when accidents occur and you make claims, they may be very difficult to deal with.

There are ways to keep your auto insurance cost low like installing safety devices to your car. These safety devices include anti-theft devices, airbags and seatbelts. When you have these devices in your vehicle, the auto insurance company will rate your car as low risk and safe for driving. This can lower the rate of your auto insurance premiums.

Auto insurance cost also varies from state to state. Some state have higher rate than others like New York car insurance is higher than that of Ohio car insurance. Auto insurance for women is sometimes lower than that of men because typically men drive more mileage than most women increasing the risk factor of accidents thus increasing also the auto insurance cost.

Auto insurance is a necessity before you can drive a vehicle. Do not just accept that car insurance is always expensive since it can save you a lot of money later when you do figure in an accident not withstanding the cost of penalties and suspensions if you are caught driving without a car insurance. Auto insurance is simply a way of smoothing out the financial consequences of an accident and if you don’t have auto insurance right now, go out there and start getting one.

About this Author

Elsa Rida is a freelance writer on the internet. If you want to learn more about auto insurance, then you can go to my website at http://www.car-insurance-code.com

o If the bread winner of the family meets an unexpected death, the dependents will be subjected to many sufferings. They will suffer in all fronts of life. At least to come out from the financial difficulties the life insurance cover is highly essential. Life insurance schemes as the name suggests provide the insurance cover for the life. In such cases of eventuality, the total policy amount with the bonuses accrued over it during the entire period of payments will be given to the legal heirs. One bigger advantage of this insurance scheme is that the dependents who claim the insurance amount need not pay any further installments.

o The Life insurance cover is extended to not only for the case of the death of the insurer, it gives financial support if the insurer becomes bed ridden with inability to do any activity. Loss of limbs and such greater pathetic situations are also covered under these insurance schemes.

o Depending up on the term of the payment, the insurer is eligible to get back the total policy amount with the bonuses for whole the years of premium payments. But the problem with such insurance policies is the insurance cover gets seized by the maturity of the policy. During the term of the policy, the insurance cover is applied and the legal heirs need not pay any further installments at the eventuality of claiming the insurance amount.

o Depending up on the term of the insurance policy, the monthly payments will be varying. The least expensive life insurance policies are term life insurance policies. Some of these insurance policies can be taken for life term. These types of policies will be effective only after the death of the insurer. The dependents or nominee of the insurer will get the policy amount after the demise of the insurer. The monthly premium will be much less for these types of policies.

o Other term life insurance policies are usually cover fixed periods like 5 years, 10 years, 25 years, etc.

Present day it is very easy to insure with an insurance agency with the online facility. You just log on to internet online facility and fill the application.

About this Author

Jon Elton owns and operates a Car Home Life Insurance Quotes website to help while making decision about insurance. He also operates a Cheap Car Auto Insurance [http://mcobi.org] site to help taking decision about auto Insurance.

]]> http://haa.com.tw/life-insurance-policy.html/feed/ 0 http://haa.com.tw/easy-ways-to-get-affordable-term-life-insurance.html/ http://haa.com.tw/easy-ways-to-get-affordable-term-life-insurance.html/#comments Sun, 12 Feb 2012 00:28:24 +0000 mindy http://haa.com.tw/?p=758 Continue reading →]]> If you’re on the lookout for affordable term life insurance then this article is for you. Contrary to popular belief affordable term life insurance can be a smart decision for a lot of people. In most cases the only drawback regarding term life insurance is the length of the insurance policy. Most insurance underwriters will only carry a term life insurance policy for a maximum of 30 years. With this one drawback there are many consumers who instead opt for a regular life insurance policy, which can also be a cash-value policy. The monthly insurance payments or premiums for this type of life insurance policy are usually more expensive when compared to a standard term life insurance policy. These standard life insurance policies offer a lifetime value and feature a built in savings program. Whether or not that sways you to purchase that type of policy over a term life insurance policy is a decision only you can make.

I will assume you are still interested in the benefits of a term life insurance policy and how easy it can be to actually find affordable term life insurance. The best place to shop for affordable life insurance policies is on the Internet. The ability to instantly and easily compare hundreds of life insurance offerings from many different companies gives you the ability to truly find the most affordable term life insurance policy with all of the features you’re interested in having.

In fact many insurance companies offer websites that are very user friendly and easy to navigate. Best of all you don’t have to worry about talking to an insurance agent that you feel may be interested in only making a sale instead of best serving your life insurance needs. When using online access to view insurance quotes you can quickly compare polices and insurance quotes to see which insurance company offers the best policy for your needs at an affordable price. In order to speed up the process you should have some information about your current state of health readily available. Information such as your current weight, blood pressure, cholesterol level and previous medical history when available will greatly aid in speeding up the life insurance quote process and allow you to receive a more accurate rate in your free term life insurance quote.

There are a few bits of crucial information that can help you lower your current term life insurance rates. For instance if you just had a health checkup (which you should do annually) and can show that you’ve lost weight or decreased your cholesterol level this will allow you to be offered a cheaper term life insurance quote. Additionally if you were a smoker and decided to kick the habit you could be entitled to a decrease in your current term life insurance rate.

Other methods of achieving a lower out of pocket cost for your term life insurance revolve around your actual insurance company. Some will offer a slight discount provided you have a your insurance payment automatically taken out of your bank account. Even more companies offer a substantial savings for each insurance coverage amount increase. Make sure to compare what the rates are between amounts such as $250,000, $500,000 and higher. One thing to consider is your age. As with most life insurance, term life policies are cheaper the younger you are so if you’re debating on whether or not to purchase an affordable term life insurance policy you may want to do so before your next birthday. Finally if you’ve ever had any type of surgical procedure done to treat a major medical condition you may be able to negotiate for a lower term life rate depending on how long ago your operation to treat the medical condition took place.

Finding affordable term life insurance doesn’t have to be a stressful situation. Especially if you’ve taken the time to familiarize yourself with the many ways to effectively lower your insurance costs. One thing is for sure, its well worth your time and pocketbook to do some comparative shopping online in order to find the best and most affordable term life insurance provider.

About this Author

Timothy Gorman is a successful Webmaster and publisher of Best-Free-Insurance-Quotes.com. He provides more life insurance advice to include ways to find affordable term life insurance [http://www.best-free-insurance-quotes.com/life-insurance.html] that you can research in your pajamas on his website.

]]> http://haa.com.tw/easy-ways-to-get-affordable-term-life-insurance.html/feed/ 0 http://haa.com.tw/individual-health-insurance-2.html/ http://haa.com.tw/individual-health-insurance-2.html/#comments Sun, 12 Feb 2012 00:28:23 +0000 mindy http://haa.com.tw/?p=756 Continue reading →]]> What Is An Individual Health Insurance Plan?

An individual health insurance plan is a plan mainly provided to self-employed and unemployed people. Occasionally, people will elect individual coverage even if their company provides a plan. “Individual” plans in the health insurance business do not actually refer to insurance provided to one person. It just means that a company or employer does not pay part of the bill. If someone pays the entire premium of a family plan, then such coverage is still considered as “individual”. Rates for such individual plans will always be more expensive than group plans. The price of a group plan is lower because participating companies buy many plans from an insurance company (at cheaper bulk rate) and then the employer will pay part of the premium for employees.

Individual health plans and group market plans both offer the same type of options (for the most part). They offer health maintenance organization (HMO) plans, preferred provider organization (PPO), point-of-service (POS) plans and traditional fee-for-service arrangement. For those electing a group plan, they can receive a substantial discount on premiums and comprehensive policies. Keep in mind though that a group insurance plan will only cover someone while they are at the same job. If a consumer ends up in a situation without access to a group plan (i.e. laid off without other employment options), then they will quickly learn how expensive that the alternatives can be. Individual plans are usually only recommended to those people without the group plan option.

Disadvantages Of Individual Health Insurance Policies

Insurance companies might not cover people with such plans. This might be pretty scary for those with a family or those in need of serious healthcare. With individual health insurance, there is a requirement to submit an application that is medically underwritten by the insurer. This requires an insurer to examine a candidate’s medical record. As with most other types of insurance (i.e. auto insurance), premium is established by risk. Depending on the risk, insurers can even choose not to offer someone a health insurance policy. Alternatively, an insurer may require certain exclusions to be added to an insurance policy (mainly for those with health problems). Some states offer what is known as “guaranteed issue”. This law forces insurance companies to provide an individual health plan to those needing one. This is great protection but will ultimately increase premiums.

COBRA Insurance

Another temporary option for those leaving an employer with a group health insurance plan is what is called COBRA coverage. Cobra refers to Consolidated Omnibus Budget Reconciliation Act (established 1985). Many employers provide this coverage to employees for an additional 18 months after leaving the company. Such people will be forced to pay the full premium if they elect COBRA insurance coverage. Consumers have 60 days to determine if COBRA works for them. If it is not desirable, consumers should start shopping for individual health insurance coverage. COBRA insurance will cover all family members (even if there are pre-existing conditions). This might be a big advantage over some individual plans.

Tips For Finding An Individual Health Insurance Policy

If you have some favorite physicians, check to see if they are included on an insurance company’s network (i.e. PPO or HMO in-network).
Determine if you want a comprehensive plan (covering numerous potential expenses) or if you want a catastrophic plan covering you in the event of very serious health issues.
Don’t always lean towards the cheapest policy. You need to find a policy that fits all of your personal needs.
Evaluate all financial considerations including annual premium, deductible, co-payments, maximum out-of-pocket expenses and annual limitations.
Some group insurance plans give you the option of converting to an individual health plan. Although the conversion will cost more than a group plan, it is considerably less than buying an individual plan directly.
If you have pre-existing conditions, most states require you to obtain some type of coverage within 63 days or such pre-existing conditions will not be eligible for coverage.
Always check if your spouse has group plan options at her place of employment.
There are other types of group plans offered such as through the AARP and other organizations.

Individual Health Insurance Final Thoughts

Consumers should educate themselves on the types of individual health insurance policies offered. The best place to look is the internet due to accessibility of options and comparison shopping. Insurance premiums can vary significantly from one insurer to the next. Regardless of any personal situation, consumers should always have health insurance to cover themselves in the event of a serious injury or illness. Most consumers don’t adequately research all options. This is surprisingly considering that someone can be stuck with an undesirable policy for an extended period of time.

About this Author

Cory has a website covering the major types of insurance. You can find many insurance articles [http://www.insurancearticles.info], including auto insurance, home insurance, life insurance and health insurance. Also, you can compare numerous insurance quotes from different companies.

]]> http://haa.com.tw/individual-health-insurance-2.html/feed/ 0 http://haa.com.tw/insurance-law-an-indian-perspective.html/ http://haa.com.tw/insurance-law-an-indian-perspective.html/#comments Sun, 12 Feb 2012 00:28:22 +0000 mindy http://haa.com.tw/?p=754 Continue reading →]]> INTRODUCTION

“Insurance should be bought to protect you against a calamity that would otherwise be financially devastating.”

In simple terms, insurance allows someone who suffers a loss or accident to be compensated for the effects of their misfortune. It lets you protect yourself against everyday risks to your health, home and financial situation.

Insurance in India started without any regulation in the Nineteenth Century. It was a typical story of a colonial epoch: few British insurance companies dominating the market serving mostly large urban centers. After the independence, it took a theatrical turn. Insurance was nationalized. First, the life insurance companies were nationalized in 1956, and then the general insurance business was nationalized in 1972. It was only in 1999 that the private insurance companies have been allowed back into the business of insurance with a maximum of 26% of foreign holding.

“The insurance industry is enormous and can be quite intimidating. Insurance is being sold for almost anything and everything you can imagine. Determining what’s right for you can be a very daunting task.”

Concepts of insurance have been extended beyond the coverage of tangible asset. Now the risk of losses due to sudden changes in currency exchange rates, political disturbance, negligence and liability for the damages can also be covered.

But if a person thoughtfully invests in insurance for his property prior to any unexpected contingency then he will be suitably compensated for his loss as soon as the extent of damage is ascertained.

The entry of the State Bank of India with its proposal of bank assurance brings a new dynamics in the game. The collective experience of the other countries in Asia has already deregulated their markets and has allowed foreign companies to participate. If the experience of the other countries is any guide, the dominance of the Life Insurance Corporation and the General Insurance Corporation is not going to disappear any time soon.

The aim of all insurance is to compensate the owner against loss arising from a variety of risks, which he anticipates, to his life, property and business. Insurance is mainly of two types: life insurance and general insurance. General insurance means Fire, Marine and Miscellaneous insurance which includes insurance against burglary or theft, fidelity guarantee, insurance for employer’s liability, and insurance of motor vehicles, livestock and crops.

LIFE INSURANCE IN INDIA

“Life insurance is the heartfelt love letter ever written.

It calms down the crying of a hungry baby at night. It relieves the heart of a bereaved widow.

It is the comforting whisper in the dark silent hours of the night.”

Life insurance made its debut in India well over 100 years ago. Its salient features are not as widely understood in our country as they ought to be. There is no statutory definition of life insurance, but it has been defined as a contract of insurance whereby the insured agrees to pay certain sums called premiums, at specified time, and in consideration thereof the insurer agreed to pay certain sums of money on certain condition sand in specified way upon happening of a particular event contingent upon the duration of human life.

Life insurance is superior to other forms of savings!

“There is no death. Life Insurance exalts life and defeats death.

It is the premium we pay for the freedom of living after death.”

Savings through life insurance guarantee full protection against risk of death of the saver. In life insurance, on death, the full sum assured is payable (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.

The essential features of life insurance are a) it is a contract relating to human life, which b) provides for payment of lump-sum amount, and c) the amount is paid after the expiry of certain period or on the death of the assured. The very purpose and object of the assured in taking policies from life insurance companies is to safeguard the interest of his dependents viz., wife and children as the case may be, in the even of premature death of the assured as a result of the happening in any contingency. A life insurance policy is also generally accepted as security for even a commercial loan.

NON-LIFE INSURANCE

“Every asset has a value and the business of general insurance is related to the protection of economic value of assets.”

Non-life insurance means insurance other than life insurance such as fire, marine, accident, medical, motor vehicle and household insurance. Assets would have been created through the efforts of owner, which can be in the form of building, vehicles, machinery and other tangible properties. Since tangible property has a physical shape and consistency, it is subject to many risks ranging from fire, allied perils to theft and robbery.

Few of the General Insurance policies are:

Property Insurance: The home is most valued possession. The policy is designed to cover the various risks under a single policy. It provides protection for property and interest of the insured and family.

Health Insurance: It provides cover, which takes care of medical expenses following hospitalization from sudden illness or accident.

Personal Accident Insurance: This insurance policy provides compensation for loss of life or injury (partial or permanent) caused by an accident. This includes reimbursement of cost of treatment and the use of hospital facilities for the treatment.

Travel Insurance: The policy covers the insured against various eventualities while traveling abroad. It covers the insured against personal accident, medical expenses and repatriation, loss of checked baggage, passport etc.

Liability Insurance: This policy indemnifies the Directors or Officers or other professionals against loss arising from claims made against them by reason of any wrongful Act in their Official capacity.

Motor Insurance: Motor Vehicles Act states that every motor vehicle plying on the road has to be insured, with at least Liability only policy. There are two types of policy one covering the act of liability, while other covers insurers all liability and damage caused to one’s vehicles.

JOURNEY FROM AN INFANT TO ADOLESCENCE!

Historical Perspective

The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered more risky for coverage.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to the Triton (Tital) Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British. Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies.

Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during 20′s and 30′s desecrated insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization. This was in conformity with the Government’s chosen path of State lead planning and development.

The (non-life) insurance business continued to prosper with the private sector till 1972. Their operations were restricted to organized trade and industry in large cities. The general insurance industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and grouped into four companies – National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company. These were subsidiaries of the General Insurance Company (GIC).

The life insurance industry was nationalized under the Life Insurance Corporation (LIC) Act of India. In some ways, the LIC has become very flourishing. Regardless of being a monopoly, it has some 60-70 million policyholders. Given that the Indian middle-class is around 250-300 million, the LIC has managed to capture some 30 odd percent of it. Around 48% of the customers of the LIC are from rural and semi-urban areas. This probably would not have happened had the charter of the LIC not specifically set out the goal of serving the rural areas. A high saving rate in India is one of the exogenous factors that have helped the LIC to grow rapidly in recent years. Despite the saving rate being high in India (compared with other countries with a similar level of development), Indians display high degree of risk aversion. Thus, nearly half of the investments are in physical assets (like property and gold). Around twenty three percent are in (low yielding but safe) bank deposits. In addition, some 1.3 percent of the GDP are in life insurance related savings vehicles. This figure has doubled between 1985 and 1995.

A World viewpoint – Life Insurance in India

In many countries, insurance has been a form of savings. In many developed countries, a significant fraction of domestic saving is in the form of donation insurance plans. This is not surprising. The prominence of some developing countries is more surprising. For example, South Africa features at the number two spot. India is nestled between Chile and Italy. This is even more surprising given the levels of economic development in Chile and Italy. Thus, we can conclude that there is an insurance culture in India despite a low per capita income. This promises well for future growth. Specifically, when the income level improves, insurance (especially life) is likely to grow rapidly.

INSURANCE SECTOR REFORM:

Committee Reports: One Known, One Anonymous!

Although Indian markets were privatized and opened up to foreign companies in a number of sectors in 1991, insurance remained out of bounds on both counts. The government wanted to proceed with caution. With pressure from the opposition, the government (at the time, dominated by the Congress Party) decided to set up a committee headed by Mr. R. N. Malhotra (the then Governor of the Reserve Bank of India).

Malhotra Committee

Liberalization of the Indian insurance market was suggested in a report released in 1994 by the Malhotra Committee, indicating that the market should be opened to private-sector competition, and eventually, foreign private-sector competition. It also investigated the level of satisfaction of the customers of the LIC. Inquisitively, the level of customer satisfaction seemed to be high.

In 1993, Malhotra Committee – headed by former Finance Secretary and RBI Governor Mr. R. N. Malhotra – was formed to evaluate the Indian insurance industry and recommend its future course. The Malhotra committee was set up with the aim of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the needs of the economy keeping in mind the structural changes presently happening and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994, the committee submitted the report and some of the key recommendations included:

o Structure

Government bet in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate.

Competition

Private Companies with a minimum paid up capital of Rs.1 billion should be allowed to enter the sector. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state.

o Regulatory Body

The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance – a part of the Finance Ministry- should be made Independent.

o Investments

Compulsory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time).

o Customer Service

LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. The committee accentuated that in order to improve the customer services and increase the coverage of insurance policies, industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new competitors could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores.

The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body – The Insurance Regulatory and Development Authority.

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has meticulously stuck to its schedule of framing regulations and registering the private sector insurance companies.

Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken at the same time to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products.

The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity lid for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent.

The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 12 life insurance and 8 general insurance companies have been registered. A host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies since 2001

Mukherjee Committee

Immediately after the publication of the Malhotra Committee Report, a new committee, Mukherjee Committee was set up to make concrete plans for the requirements of the newly formed insurance companies. Recommendations of the Mukherjee Committee were never disclosed to the public. But, from the information that filtered out it became clear that the committee recommended the inclusion of certain ratios in insurance company balance sheets to ensure transparency in accounting. But the Finance Minister objected to it and it was argued by him, probably on the advice of some of the potential competitors, that it could affect the prospects of a developing insurance company.

LAW COMMISSION OF INDIA ON REVISION OF THE INSURANCE ACT 1938 – 190th Law Commission Report

The Law Commission on 16th June 2003 released a Consultation Paper on the Revision of the Insurance Act, 1938. The previous exercise to amend the Insurance Act, 1938 was undertaken in 1999 at the time of enactment of the Insurance Regulatory Development Authority Act, 1999 (IRDA Act).

The Commission undertook the present exercise in the context of the changed policy that has permitted private insurance companies both in the life and non-life sectors. A need has been felt to toughen the regulatory mechanism even while streamlining the existing legislation with a view to removing portions that have become superfluous as a consequence of the recent changes.

Among the major areas of changes, the Consultation paper suggested the following:

a. merging of the provisions of the IRDA Act with the Insurance Act to avoid multiplicity of legislations;

b. deletion of redundant and transitory provisions in the Insurance Act, 1938;

c. Amendments reflect the changed policy of permitting private insurance companies and strengthening the regulatory mechanism;

d. Providing for stringent norms regarding maintenance of ‘solvency margin’ and investments by both public sector and private sector insurance companies;

e. Providing for a full-fledged grievance redressal mechanism that includes:

o The constitution of Grievance Redressal Authorities (GRAs) comprising one judicial and two technical members to deal with complaints/claims of policyholders against insurers (the GRAs are expected to replace the present system of insurer appointed Ombudsman);

o Appointment of adjudicating officers by the IRDA to determine and levy penalties on defaulting insurers, insurance intermediaries and insurance agents;

o Providing for an appeal against the decisions of the IRDA, GRAs and adjudicating officers to an Insurance Appellate Tribunal (IAT) comprising a judge (sitting or retired) of the Supreme Court/Chief Justice of a High Court as presiding officer and two other members having sufficient experience in insurance matters;

o Providing for a statutory appeal to the Supreme Court against the decisions of the IAT.

LIFE & NON-LIFE INSURANCE – Development and Growth!

The year 2006 turned out to be a momentous year for the insurance sector as regulator the Insurance Regulatory Development Authority Act, laid the foundation for free pricing general insurance from 2007, while many companies announced plans to attack into the sector.

Both domestic and foreign players robustly pursued their long-pending demand for increasing the FDI limit from 26 per cent to 49 per cent and toward the fag end of the year, the Government sent the Comprehensive Insurance Bill to Group of Ministers for consideration amid strong reservation from Left parties. The Bill is likely to be taken up in the Budget session of Parliament.

The infiltration rates of health and other non-life insurances in India are well below the international level. These facts indicate immense growth potential of the insurance sector. The hike in FDI limit to 49 per cent was proposed by the Government last year. This has not been operationalized as legislative changes are required for such hike. Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have tipped into the Indian market and 21 private companies have been granted licenses.

The involvement of the private insurers in various industry segments has increased on account of both their capturing a part of the business which was earlier underwritten by the public sector insurers and also creating additional business boulevards. To this effect, the public sector insurers have been unable to draw upon their inherent strengths to capture additional premium. Of the growth in premium in 2004-05, 66.27 per cent has been captured by the private insurers despite having 20 per cent market share.

The life insurance industry recorded a premium income of Rs.82854.80 crore during the financial year 2004-05 as against Rs.66653.75 crore in the previous financial year, recording a growth of 24.31 per cent. The contribution of first year premium, single premium and renewal premium to the total premium was Rs.15881.33 crore (19.16 per cent); Rs.10336.30 crore (12.47 per cent); and Rs.56637.16 crore (68.36 per cent), respectively. In the year 2000-01, when the industry was opened up to the private players, the life insurance premium was Rs.34,898.48 crore which constituted of Rs. 6996.95 crore of first year premium, Rs. 25191.07 crore of renewal premium and Rs. 2740.45 crore of single premium. Post opening up, single premium had declined from Rs.9, 194.07 crore in the year 2001-02 to Rs.5674.14 crore in 2002-03 with the withdrawal of the guaranteed return policies. Though it went up marginally in 2003-04 to Rs.5936.50 crore (4.62 per cent growth) 2004-05, however, witnessed a significant shift with the single premium income rising to Rs. 10336.30 crore showing 74.11 per cent growth over 2003-04.

The size of life insurance market increased on the strength of growth in the economy and concomitant increase in per capita income. This resulted in a favourable growth in total premium both for LIC (18.25 per cent) and to the new insurers (147.65 per cent) in 2004-05. The higher growth for the new insurers is to be viewed in the context of a low base in 2003- 04. However, the new insurers have improved their market share from 4.68 in 2003-04 to 9.33 in 2004-05.

The segment wise break up of fire, marine and miscellaneous segments in case of the public sector insurers was Rs.2411.38 crore, Rs.982.99 crore and Rs.10578.59 crore, i.e., a growth of (-)1.43 per cent, 1.81 per cent and 6.58 per cent. The public sector insurers reported growth in Motor and Health segments (9 and 24 per cent). These segments accounted for 45 and 10 per cent of the business underwritten by the public sector insurers. Fire and “Others” accounted for 17.26 and 11 per cent of the premium underwritten. Aviation, Liability, “Others” and Fire recorded negative growth of 29, 21, 3.58 and 1.43 per cent. In no other country that opened at the same time as India have foreign companies been able to grab a 22 per cent market share in the life segment and about 20 per cent in the general insurance segment. The share of foreign insurers in other competing Asian markets is not more than 5 to 10 per cent.

The life insurance sector grew new premium at a rate not seen before while the general insurance sector grew at a faster rate. Two new players entered into life insurance – Shriram Life and Bharti Axa Life – taking the total number of life players to 16. There was one new entrant to the non-life sector in the form of a standalone health insurance company – Star Health and Allied Insurance, taking the non-life players to 14.

A large number of companies, mostly nationalized banks (about 14) such as Bank of India and Punjab National Bank, have announced plans to enter the insurance sector and some of them have also formed joint ventures.

The proposed change in FDI cap is part of the comprehensive amendments to insurance laws – The Insurance Act of 1999, LIC Act, 1956 and IRDA Act, 1999. After the proposed amendments in the insurance laws LIC would be able to maintain reserves while insurance companies would be able to raise resources other than equity.

About 14 banks are in queue to enter insurance sector and the year 2006 saw several joint venture announcements while others scout partners. Bank of India has teamed up with Union Bank and Japanese insurance major Dai-ichi Mutual Life while PNB tied up with Vijaya Bank and Principal for foraying into life insurance. Allahabad Bank, Karnataka Bank, Indian Overseas Bank, Dabur Investment Corporation and Sompo Japan Insurance Inc have tied up for forming a non-life insurance company while Bank of Maharashtra has tied up with Shriram Group and South Africa’s Sanlam group for non-life insurance venture.

CONCLUSION

It seems cynical that the LIC and the GIC will wither and die within the next decade or two. The IRDA has taken “at a snail’s pace” approach. It has been very cautious in granting licenses. It has set up fairly strict standards for all aspects of the insurance business (with the probable exception of the disclosure requirements). The regulators always walk a fine line. Too many regulations kill the motivation of the newcomers; too relaxed regulations may induce failure and fraud that led to nationalization in the first place. India is not unique among the developing countries where the insurance business has been opened up to foreign competitors.

The insurance business is at a critical stage in India. Over the next couple of decades we are likely to witness high growth in the insurance sector for two reasons namely; financial deregulation always speeds up the development of the insurance sector and growth in per capita GDP also helps the insurance business to grow.

About this Author

]]> http://haa.com.tw/insurance-law-an-indian-perspective.html/feed/ 0 http://haa.com.tw/insurance-haters-anonymous.html/ http://haa.com.tw/insurance-haters-anonymous.html/#comments Sun, 12 Feb 2012 00:28:21 +0000 mindy http://haa.com.tw/?p=752 Continue reading →]]> Hello, my name is Chris, and I hate insurance. My father hated insurance before me, and for all I know his father before him. More…Kind of a family tradition I suppose. I have insurance for my home, insurance for my car, insurance for my life, insurance for my boat, insurance for my kids, insurance for my health, insurance for my teeth, insurance for my prescriptions, insurance for my bank loans, and insurance for when I travel. Wow! It’s a wonder, I don’t have insurance for my insurance. Don’t laugh, I’m sure I heard somewhere that there is an insurance company that insures other insurance companies. Someone must be making a killing off of all this. The only insurance I don’t have these days, is pet insurance. Only because we don’t have a pet, and the kids are lobbying hard on that front.

Why Do We Hate Insurance So?

Everyone hates insurance, because it always feels like we never get anything in return for it. Normally, when I buy something, I get to walk out the door with it, or hear it, or see it, or just plain enjoy it. Insurance does none of that. It certainly seems like a pretty one sided deal. “Thank you for the cheque Mr Campbell. Oh, and just to be sure, we’ll be taking a little more next month, and the month after and the month after that. Have a nice day.” Great I think. And do I get to enjoy anything for writing all those cheques. Nope, but don’t worry your very securely insured now. I cringe just thinking about how much I’ve spent on insurance over the years. And, feel even worse when I think how little the insurance companies have actually paid out to me. In hindsight, it seems like just a really bad investment. I feel like I’ve been buying stock in all these crappy companies over the years that just keep going bankrupt. The biggest scam of all, is that most people who buy insurance, are paranoid to actually file an insurance claim, because their rates will skyrocket. Not to mention that all those previously oh-so-friendly insurance company employees treat you like a leper, who just ran over their puppy three times, and stole all their kids halloween candy.

What Is Your Deepest Fear?

We all want guarantees, we all want to know everything is going to be alright. We hope that things remain status quo, and their are no major disruptions in our lives. That’s what insurance buys. Peace of mind. Protection from the unknown. Salvation from disaster. And when it works, that’s great. Insurance is kind of a socialist sort of thing. Everybody chips in a little bit to protect the unfortunate. And that’s good. I do feel better, if I think of my insurance premiums saving someone else from a life altering disaster. And the optimist in me believes that is what truly happens most of the time. It’s when insurance companies refuse to pay out for people that really need it, the irks me the most. Especially when it’s done just to line the pockets of shareholders and greedy CEO’s. That’s really not what insurance is for. So, be smart with your insurance purchases, and remember, we’re all in this together.

About this Author

For more on insurance visit insuranceinformationonline.com or read other insurance articles at http://foolishmumbles.com/category/insurance/.

]]> http://haa.com.tw/insurance-haters-anonymous.html/feed/ 0 http://haa.com.tw/cheap-illinois-homeowners-insurance-rates-the-quick-guide-to-low-cost-il-home-insurance.html/ http://haa.com.tw/cheap-illinois-homeowners-insurance-rates-the-quick-guide-to-low-cost-il-home-insurance.html/#comments Sun, 12 Feb 2012 00:28:19 +0000 mindy http://haa.com.tw/?p=750 Continue reading →]]> Finding cheap Illinois homeowners insurance is key whether you are a new home owner or you have lived in your home for years and years. A cheap IL home insurance rate is after all just one more way of being able to save your money for fun things like vacations, new cars, and going out to eat. After, why pay more than you need to for something as boring as insurance?

The state of Illinois might not be one of the biggest in area in the United States, but it sure has a lot of people. With an estimated 12 million residents, the demand for Illinois homeowners insurance is quite great. However, people don’t just want any kind of policy, they want a cheap one! There are many things you can do in order to save money when it comes to saving money on your IL home insurance policy. Below you will find the many tips given to customers and how they act in saving you money on that policy you need.

Safety Features And Cheap Illinois Homeowners Insurance

Whether it is a life insurance policy, homeowners insurance policy, or auto insurance policy; the entire insurance industry values safety. This means that if you show the company at the time of getting a quote that you are an individual that tries to prevent anything harmful that may come about unexpectedly, they will typically give you a better price for the policy.

One way of lowering your coverage is to put smoke detectors and sprinklers in the inside of your home in case of fire. It is true that every house comes with smoke detectors and some of them come with sprinklers nowadays, but the more you add, the more your cost will be lowered by these features.

You can also prevent theft of your personal property (something that is covered under every homeowner’s insurance policy) by placing alarm systems in your home. There are many companies that offer different ways to protect your home from thieves and purchasing one of them might not be a bad idea if what you want is cheap Illinois home insurance.

Yet another way perhaps a little bit more out of the ordinary to cope with anyone trying to enter and come out of your house is to put locks on the windows. Although this might lower your cost, you might want to reconsider because in case of a fire it will be harder for your family and yourself to escape the dwelling; but nevertheless, this also works in lowering your price.

Shop Around For Cheap Illinois Homeowners Insurance

This might be perhaps the most important tip for lowering your Illinois homeowners insurance cost, simply because the more you do your homework, the more chances of finding what you want. You can either go and visit local agencies in person and ask them about the many things that they have available (such as the types of coverage and the many exclusions that they may have in their policy) or if you are a technology person you can do it online.

If you visit them in person you will be able to ask the agent for specific discounts that they may have and ask him or her about the IL homeowner insurance industry. If you do it online you will have to do this things yourself, but you will be able to do it much quicker and retrieve quotes from each website in a matter of minutes. After all, isn’t a few moments spent doing research worth it to find a low cost Illinois homeowners insurance policy and save yourself $100′s or even $1,000′s over the course of a year?

Your Claims History And Cheap Illinois Homeowners Insurance

You may be familiar with what an Illinois homeowner insurance policy covers and the things your must do in order to get reimbursed. One of the things covered by many home insurance policies that people use repetitively is the possession coverage. This covers your possessions all over the world and the insurance company will just give you money for them. Many other insurance companies have a thing called the “accidental disappearance” coverage. What this does is simply give you money for an item that you may have lost during traveling or just out of the blue.

If your company offers you any of the things mentioned above it is better to not claim things that you can just pay out of your pocket. A reason for this is that the more you claim, the more the insurance company will be paying out of their pockets. Claims lead to higher prices in any insurance business out there and if you start setting up claims for every lost item of yours, you might be headed toward a bad road on your cheap Illinois home insurance quest.

Your Deductible And Cheap Illinois Homeowners Insurance

Deductibles are one of the main things that people use to try and get a little money off their monthly premiums. The important thing to note about this is that people should only try and do this if they have the resources to cope with the change. What this means is that if you don’t have the money to pay up front in the event of an accident then do not change your deductible.

Insurance companies simply lower the premiums when one raises the deductible as a way of saying “thank you”. This is because you are taking cost out of their pockets and turning it into your cost. After a claim is made you will have to pay the deductible and the insurance company will pay the rest of the price once that cost is paid. A common deductible in the home insurance business is that of $250 but people often raise it to $500 or even $1,000.

Your Property And Cheap Illinois Homeowners Insurance

If what you want is a cheap Illinois home insurance policy then you must start thinking ahead even before you buy a residence. You must always inspect the land where the house is at in order to give yourself an idea of how much it would be to insure the property. Make sure the land is secure and not prone to floods. Rain can come hard at anytime during the year and it is important to be protected against flooding if you want a good experience.

When buying a home also try and get a house with a hard frame. This will work on your favor not only because the house will be more secure and last longer, but because in case of an earthquake or any other natural disaster hitting the home the chances of it remaining standing will be greater. People with brick houses often pay less in Illinois homeowners insurance premiums due to the safety of their homes and the durability of the dwelling.

Compare Cheap Illinois Homeowners Insurance Quotes

As you can see there are many things that you can do without even thinking about it that will lower the monthly premiums on your Illinois home insurance policy. If you think safety first and inspect the land before even buying the house then you will have a better time and a lower monthly premium. If that still doesn’t satisfy you then try raising your deductible (only if you can afford it). If you do all this I can guarantee you that the cheap Illinois home insurance policy that you have been waiting for will be yours in no time at all!

About this Author

Compare cheap Illinois homeowners insurance quotes from multiple companies side by side online in order to find the best deal. Get started finding cheap home insurance rates today!

]]> http://haa.com.tw/cheap-illinois-homeowners-insurance-rates-the-quick-guide-to-low-cost-il-home-insurance.html/feed/ 0 http://haa.com.tw/quick-approval-life-insurance-life-insurance-criteria-for-being-approved-quickly.html/ http://haa.com.tw/quick-approval-life-insurance-life-insurance-criteria-for-being-approved-quickly.html/#comments Sun, 12 Feb 2012 00:28:18 +0000 mindy http://haa.com.tw/?p=748 Continue reading →]]> What are some of the life insurance criteria for being approved quickly? Many people are interested in finding a quick approval life insurance policy as they do not want to go through a long and drawn out medical underwriting process. Enforcements and the criteria for people to be approved quickly into life insurance policies within life insurance industry are simply made by the companies so that they don’t lose money when it comes to claims.

For life insurance companies there is a risk associated with insuring someone because you are basically either going to have to end up paying the death benefit of the person that is deceased, or you will gain money by their paying of premiums; however, it’s important to understand that there are applicants that have it easier when it comes to life insurance policies, and that the life insurance criteria for being approved quickly varies according to many factors and is not the same from company to company.

Age Is Perhaps One of the Most Important Criteria to be Approved Quickly For A Life Insurance Policy

Although not all the companies are the same, one of the most important things about life insurance is to try and get the policy while you are still young. Just like the health insurance industry, the life insurance industry understands that the risk of dying increases as your age increases. It is because of this reason that premiums for younger people are less than those of older individuals, and it is also because of this that many life insurance companies are starting to use medical examinations as one of the most important factors in being approved.

An example of this would be a person trying to get a term life insurance policy in an insurance company that has offices all across the United States. If the person is younger or of middle age, endless possibilities will arise because they will be able to purchase term life insurance (temporary life insurance that only covers you for a specific amount of time) or a permanent life insurance policy (a type of policy that covers you for life) because the insurance company knows that the chances of you dying young are very slim (unless you have a critical illness that is). It is for this reason that many senior citizens have trouble qualifying for life insurance and they must go apply in companies that specialize in senior citizen products.

It is important to highlight that just because a person is old it does not mean that they won’t be approved easily for life insurance. If you are a senior citizen of 50 years of age or older and you are in perfect health conditions with no risk of any serious illnesses, the life insurance company might even propose a term life insurance policy, a whole life insurance policy or any other type of policy; but it all depends on how good your health is.

The Credit Report and It’s Role For a Person to Be Approved Quickly

Another way or criteria for which a person can be approved very quickly when applying to life insurance is credit reports. Many people argue about this measure because they don’t think its fair that their credit report is now taking the place of any paperwork and it is becoming more and more important in all aspects of life. The reason credit report can get you accepted very quickly is simply your commitment to the company.

What this simply means is that if you have a better credit report it will be more credible when you tell your company that you will be paying premiums every month at the exact same date and the entire amount without a penny less. On the other hand, if you have a bad credit some companies might not even take the risk of insuring you because they don’t want to insure an individual that is true to his or her word. As you can see credit report has not become a major thing when it comes to life insurance companies.

Your Lifestyle Can Help You Get Approved Quickly

Last but not least in order to get approved quickly you should be a person that does not take many risks in life. This means that your job is not a high risk one and that you do not have any hobbies that threaten your life. If you want to see an example of what this means let us compare a firefighter with a lawyer. A firefighter will more than likely be faced with life threatening conditions every single time they go into a fire. They have to run into a house consumed by flames to prevent other houses from burning or to save a life. On the other hand you have a lawyer that spends most of his or her day sitting behind a desk wondering about how to win the case. All they do that can cause harm their lives other than health related conditions involve driving to and from work, and to the courthouse. Unfortunately for a firefighter it will be a little bit more difficult for a company to insured them because they know the risk associated with their job. The same thing applies to hobbies.

Who do you think will have an easier time applying and getting accepted for a life insurance policy? A person that enjoys sailing, sky diving and kayaking in wild rivers or a person that enjoys going out on the beach, spending time with the family and maybe on occasion playing chess? The answer is the person that has the hobbies with the least degree of danger. Life insurance is a business and like any other industry, its companies are concerned with making money and not losing money.

Compare Life Insurance Quotes Because Of Differences In Underwriting

As you can see the criteria for being accepted when you apply for a life insurance policy is not that hard. You must always try to apply when you are younger not mattering if you want a term or permanent life insurance policy (always remember that the younger and healthier you are, the less your premiums will be). You must also have an ok credit report that should be good when checked by the life insurance company. This helps because they can see that they are insuring a person that is making a commitment and will try to pay premiums on time.

You will also have to show the life insurance company that the risk of insuring you is not that great and show them that your hobbies are nothing to be worried about. If you follow all these steps a life insurance company will never deny you and they will be happy insuring you. The criteria for an easy acceptance in the life insurance world is not that hard; go and get the policy that you have always dreamed of!

About this Author

Remember that different life insurance companies have different underwriting standards so it can off to shop around. The more companies you comparison shop then the better chance you will have of finding a company that will give you a quick approval and give you a cheap rate. Get started comparing life insurance quotes today!

]]> http://haa.com.tw/quick-approval-life-insurance-life-insurance-criteria-for-being-approved-quickly.html/feed/ 0 http://haa.com.tw/effect-of-liberalisation-in-insurance-industry.html/ http://haa.com.tw/effect-of-liberalisation-in-insurance-industry.html/#comments Sun, 12 Feb 2012 00:28:16 +0000 mindy http://haa.com.tw/?p=746 Continue reading →]]> Introduction

The journey of insurance liberalization process in India is now over seven years old. The first major milestone in this journey has been the passing of Insurance Regulatory and Development Authority Act, 1999. This along with amendments to the Insurance Act 1983, LIC and GIC Acts paves the way for the entry of private players and possibly the privatization of the hitherto public monopolies LIC and GIC. Opening up of insurance to private sector including foreign participation has resulted into various opportunities and challenges.

Concept of Insurance

In our daily life, whenever there is uncertainly there is an involvement of risk. The instinct of security against such risk is one of the basic motivating forces for determining human attitudes. As a sequel to this quest for security, the concept of insurance must have been born. The urge to provide insurance or protection against the loss of life and property must have promoted people to make some sort of sacrifice willingly in order to achieve security through collective co-operation. In this sense, the story of insurance is probably as old as the story of mankind.

Life insurance in particular provides protection to household against the risk of premature death of its income earning member. Life insurance in modern times also provides protection against other life related risks such as that of longevity (i.e. risk of outliving of source of income) and risk of disabled and sickness (health insurance). The products provide for longevity are pensions and annuities (insurance against old age). Non-life insurance provides protection against accidents, property damage, theft and other liabilities. Non-life insurance contracts are typically shorter in duration as compared to life insurance contracts. The bundling together of risk coverage and saving is peculiar of life insurance. Life insurance provides both protection and investment.

Insurance is a boon to business concerns. Insurance provides short range and long range relief. The short-term relief is aimed at protecting the insured from loss of property and life by distributing the loss amongst large number of persons through the medium of professional risk bearers such as insurers. It enables a businessman to face an unforeseen loss and, therefore, he need not worry about the possible loss. The long-range object being the economic and industrial growth of the country by making an investment of huge funds available with insurers in the organized industry and commerce.

General Insurance

Prior to nationalizations of General insurance industry in 1973 the GIC Act was passed in the Parliament in 1971, but it came into effect in 1973. There was 107 General insurance companies including branches of foreign companies operating in the country upon nationalization, these companies were amalgamated and grouped into the following four subsidiaries of GIC such as National Insurance Co.Ltd., Calcutta; The New India Assurance Co. Ltd., Mumbai; The Oriental Insurance Co. Ltd., New Delhi and United India Insurance Co. Ltd., Chennai and Now delinked.

General insurance business in India is broadly divided into fire, marine and miscellaneous GIC apart from directly handling Aviation and Reinsurance business administers the Comprehensive Crop Insurance Scheme, Personal Accident Insurance, Social Security Scheme etc. The GIC and its subsidiaries in keeping with the objective of nationalization to spread the message of insurance far and wide and to provide insurance protection to weaker section of the society are making efforts to design new covers and also to popularize other non-traditional business.

Liberalization of Insurance

The comprehensive regulation of insurance business in India was brought into effect with the enactment of the Insurance Act, 1983. It tried to create a strong and powerful supervision and regulatory authority in the Controller of Insurance with powers to direct, advise, investigate, register and liquidate insurance companies etc. However, consequent upon the nationalization of insurance business, most of the regulatory functions were taken away from the Controller of Insurance and vested in the insurers themselves. The Government of India in 1993 had set up a high powered committee by R.N.Malhotra, former Governor, Reserve Bank of India, to examine the structure of the insurance industry and recommend changes to make it more efficient and competitive keeping in view the structural changes in other parts of the financial system on the country.

Malhotra Committee’s Recommendations

The committee submitted its report in January 1994 recommending that private insurers be allowed to co-exist along with government companies like LIC and GIC companies. This recommendation had been prompted by several factors such as need for greater deeper insurance coverage in the economy, and a much a greater scale of mobilization of funds from the economy, and a much a greater scale of mobilization of funds from the economy for infrastructural development. Liberalization of the insurance sector is at least partly driven by fiscal necessity of tapping the big reserve of savings in the economy. Committee’s recommendations were as follows:

o Raising the capital base of LIC and GIC up to Rs. 200 crores, half retained by the government and rest sold to the public at large with suitable reservations for its employees.

o Private sector is granted to enter insurance industry with a minimum paid up capital of Rs. 100 crores.

o Foreign insurance be allowed to enter by floating an Indian company preferably a joint venture with Indian partners.

o Steps are initiated to set up a strong and effective insurance regulatory in the form of a statutory autonomous board on the lines of SEBI.

o Limited number of private companies to be allowed in the sector. But no firm is allowed in the sector. But no firm is allowed to operate in both lines of insurance (life or non-life).

o Tariff Advisory Committee (TAC) is delinked form GIC to function as a separate statuary body under necessary supervision by the insurance regulatory authority.

oAll insurance companies be treated on equal footing and governed by the provisions of insurance Act. No special dispensation is given to government companies.

oSetting up of a strong and effective regulatory body with independent source for financing before allowing private companies into sector.

competition to government sector:

Government companies have now to face competition to private sector insurance companies not only in issuing various range of insurance products but also in various aspects in terms of customer service, channels of distribution, effective techniques of selling the products etc. privatization of the insurance sector has opened the doors to innovations in the way business can be transacted.

New age insurance companies are embarking on new concepts and more cost effective way of transacting business. The idea is clear to cater to the maximum business at the lest cost. And slowly with time, the age-old norm prevalent with government companies to expand by setting up branches seems getting lost. Among the techniques that seem to catching up fast as an alternative to cater to the rural and social sector insurance is hub and spoke arrangement. These along with the participants of NGOs and Self Help Group (SHGs) have done with most of the selling of the rural and social sector policies.

The main challenges is from the commercial banks that have vast network of branches. In this regard, it is important to mention here that LIC has entered into an arrangement with Mangalore based Corporations Bank to leverage their infrastructure for mutual benefit with the insurance monolith acquiring a strategic stake 27 per cent, Corporation Bank has decided to abandon its plans of promoting a life insurance company. The bank will act as a corporate agent for LIC in future and receive commission on policies sold through its branches. LIC with its branch network of close to 2100 offices will allow Corporation Bank to set up extension centers. ATMs or branches with in its premises. Corporation Bank would in turn implement an effective Cash Flow Management System for LIC.

IRDA Act, 1999

Preamble of IRDA Act 1999 reads ‘An Act to provide for the establishment of an authority to protect the interests of holders of insurance policies, to regulate, to promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.

Section 14 of IRDA Act, lays the duties, powers and functions of the authority. The powers and functions of the authority. The powers and functions of the Authority shall include the following.

o Issue to the applicant a certificate of registration, to renew, modify withdraw, suspend or cancel such registration.

o To protect the interest of policy holders in all matters concerning nomination of policy, surrender value f policy, insurable interest, settlement of insurance claims, other terms and conditions of contract of insurance.

o Specifying requisite qualification and practical training for insurance intermediates and agents.

o Specifying code of conduct for surveyors and loss assessors.

o Promoting efficiency in the conduct of insurance business

o Promoting and regulating professional regulators connected with the insurance and reinsurance business.

o Specifying the form and manner in which books of accounts will be maintained and statement of accounts rendered by insurers and insurance intermediaries.

o Adjudication of disputes between insurers and intermediates.

o Specifying the percentage of life insurance and general and general business to be undertaken by the insurers in rural or social sectors etc.

Section 25 provides that Insurance Advisory Committee will be constituted and shall consist of not more than 25 members.Section 26 provides that Authority may in consultation with Insurance Advisory Committee make regulations consists with this Act and the rules made there under to carry the purpose of this Act.Section 29 seeks amendment in certain provisions of Insurance Act, 1938 in the manner as set out in First Schedule. The amendments to the Insurance Act are consequential in order to empower IRDA to effectively regulate, promote, and ensure orderly growth of the Insurance industry.

Section 30 & 31seek to amend LIC Act 1956 and GIC Act 1972.

Impact of Liberalization

While nationalized insurance companies have done a commendable job in extending volume of the business opening up of insurance sector to private players was a necessity in the context of liberalization of financial sector. If traditional infrastructural and semipublic goods industries such as banking, airlines, telecom, power etc. have significant private sector presence, continuing state monopoly in provision of insurance was indefensible and therefore, the privatization of insurance has been done as discussed earlier. Its impact has to be seen in the form of creating various opportunities and challenges.

Opportunities

1. Privatization if Insurance was eliminated the monopolistic business of Life Insurance Corporation of India. It may help to cover the wide range of risk in general insurance and also in life insurance. It helps to introduce new range of products.

2. It would also result in better customer services and help improve the variety and price of insurance products.

3. The entry of new player would speed up the spread of both life and general insurance. It will increase the insurance penetration and measure of density.

4. Entry of private players will ensure the mobilization of funds that can be utilized for the purpose of infrastructure development.

5. Allowing of commercial banks into insurance business will help to mobilization of funds from the rural areas because of the availability of vast branches of the banks.

6. Most important not the least tremendous employment opportunities will be created in the field of insurance which is a burning problem of the presence day today issues.

Current Scenario

After opening up of insurance in private sector, various leading private companies including joint ventures have entered the fields of insurance both life and non-life business. Tata – AIG, Birla Sun life, HDFC standard life Insurance, Reliance General Insurance, Royal Sundaram Alliance Insurance, Bajaj Auto Alliance, IFFCO Tokio General Insurance, INA Vysya Life Insurance, SBI Life Insurance, Dabur CJU Life Insurance and Max New York Life. SBI Life insurance has launched three products Sanjeevan, Sukhjeevan and Young Sanjeevan so far and it has already sold 320 policies under its plan.

Conclusion

From the above discussion we can conclude that the entry of private players in insurance business needful and justifiable in order to enhance the efficiency of operations, achieving greater density and insurance coverage in the country and for a greater mobilization of long term savings for long gestation infrastructure prefects. New players should not be treat as rivalries to government companies, but they can supplement in achieving the objective of growth of insurance business in india.

About this Author

Name: Subbiah.B
E.Mail: suresha15@yahoo.in.
Please with any doubts and reply your suggestions to my e-mail id.

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