Govt defends merger of State Bank of Indore with SBI

Stating that the merger of State Bank of Indore with SBI was in public interest, minister of state for finance Namo Narain Meena added that State Bank of Indore customers, mainly in Madhya Pradesh and Chhattisgarh, would have access to all 14,000 SBI branches across the country and abroad

New Delhi: The government today said the merger of State Bank of Indore with the State Bank of India (SBI) is in public interest, reports PTI.

The merger is in "overall public interest," minister of state for finance Namo Narain Meena said replying to the debate on the State Bank of India (Subsidiary Banks) Amendment Bill, 2010 in Rajya Sabha.

"Now, they (State Bank of Indore customers) can deposit and withdraw money from all the branches of State Bank of India," he said.

The Upper House later passed the bill seeking to omit all references to the State Bank of Indore, which has been acquired by the SBI in July last year.

The minister said the merger would provide State Bank of Indore customers, mainly in Madhya Pradesh and Chhattisgarh, access to entire 14,000 SBI branches across the country and abroad.

"Now, they can deposit and withdraw money from all the branches of State Bank of India," he said and added that the acquisition is in "overall public interest."

He assured the members that interest of the employees and retired employees would be protected.

To queries, Mr Meena said there were 86,000 branches of banks in the country out of which 32,000 were in rural areas.

"In recent times, the number of bank branches opened every year is around four to five thousand," he said.

Mr Meena said Indian banks were doing a "commendable job" and registering profits and performed similarly during the global recession period also.

"The credit for this goes to the regulator Reserve Bank of India (RBI) and the banks," he added.


Aegon Religare: ‘Kum’ insurance ‘dene ki bimari’

The insurer has been running a high-pitched ad campaign cajoling the ‘masses’ to buy more insurance. But a look at their official ‘claims settled’ and ‘claims repudiated’ ratios indicate that the insurer’s policy payouts have a lot of scope for improvement 

Aegon Religare has had a long-running campaign on various media platforms, trying to 'educate' the general public on the need to take sufficient insurance cover. The actual advertisement shows Bollywood star Irrfan Khan highlighting the fact that the Indian masses tend to take less life insurance cover than what is required for them.

According to the insurer's ad, this (not taking sufficient life cover) is a disease in itself. So goes the catch-line in the usual ad voiceover baritone: (Not taking enough life cover) is 'Kum Insurance lene ki bimari' (the disease of taking less life cover).But herein lies the rub…

Aegon Religare can claim that the masses do not take sufficient life cover. But what about the total number of life insurance policy claims that the insurer has actually settled?

Let's keep this shrill campaign aside. According to figures released by insurance regulator IRDA's (the Insurance Regulatory and Development Authority) report for 2009-2010, the 'claims settled ratio' (the number of claims settled with respect to claims received) for Aegon Religare is a measly 48%, and the claims repudiated ratio (the number of claims rejected with respect to claims received) is as high as 44%.

It is clear from these IRDA figures that all Aegon Religare customers coming forward to take insurance cannot be guaranteed that their claims will be settled. Of course, claims settlement for a life policy depends on the details given in the offer document, like full and complete disclosure of pre-existing ailments, etc. That is because insurance contracts are signed on the condition of utmost good faith, both on part of the insurer and the policyholder.

But even a cursory glance at the figures provided by IRDA for the previous year (2008-09) clearly indicates that Aegon Religare has us wondering whether the insurer itself is suffering from 'kum insurance dene ki bimaari.' For the above year, Aegon Religare had not settled any of the claims that had been submitted to it. On top of that, the insurer repudiated 71% of the claims that had been submitted to it in the above period.

We'll leave the readers of Moneylife to decode the rationale behind Aegon's 'kum insurance lene ki bimari' ad campaign. If the 'claims settled' and the 'claims repudiated' ratios are so abysmal, why is the insurer 'educating' the masses through such high-profile campaigns?

Previously, (Max New York Life-Max fall in claims settlement ratio) Moneylife had pointed out how Max New York Life (MYNL) had settled 3,943 claims out of the 6,019 claims it had received in 2009-10; its claims settlement ratio had fallen from 90% (2008-09) to 65% (2009-10).

Despite the opening up of the insurance sector to private players, government behemoth Life Insurance Corporation of India (LIC) had a claims settled ratio of 96% and a low claim repudiation figure (just 1%) for 2009-10, according to the insurance regulator.

Among the other players, for the same period, these were the claims repudiation figures (HDFC Standard Life: 4% and ICICI Prudential: 3%) of total claims submitted. Other insurers, who have high claims repudiation figures include Future Generali (29%); IDBI Federal (23%), and Bharti AXA Life (22%), according to the IRDA report of 2009-10 quoted above.

High performers in claims settled include HDFC Standard Life (91%), ICICI Prudential (90%) and ING Vysya (89%), according to IRDA.



kale Ravindra Mukund

6 years ago

How we can know whether my claim will be settled or not? If such is is the claim repudiation ratio. low premium doesn't mean we can get the claim when it is needed most.
how can we fulproof the policy?
what about the 3 years period of early claim checking?

Melvin Joseph

6 years ago

In Life insurance, the principle of utmost good faith assumes an important role. The customer is expected to disclose all his health related issues, family history of any diseases, hobbies which can add to risk etc. at the time of taking the policy. All these areas are covered in the lengthy proposal form for life insurance. In reality, most of the customers will not be spending sufficient time in filling up this proposal form, after reading each question carefully. Most customers are interested in just signing the blank form and request the agent to fill the form.Unless the agent get the detailed answers for all these questions, he will present the proposal, as a clean case and policy will be issued. some of the health issues will be detected in the medical tests before issuing the policy, but if it is a non medical case, there is no way that the case will be rejected at this stage.
But when a claim is reported especially in the first 2 years of the policy, the insurance company will conduct a detailed enquiry on the correctness of the facts declared in the proposal. If any material information is found out wrong, the company can reject the claim.
If the customer give all the relevent information in the proposal form and if the company is still rejecting the claim, there is every chance of the consumer forum or the insurance ombudsman issuing the order in favour of the customer or his nominee.
In this highly competitive life insurance sector, no company can survive for long, if the claim settlement is not handled carefully.Educating the sales force in this area has to be done on top priority.
One reason for LIC having better claim settlement ratio is its huge number of small value policies, which is in force for more than 2 years.
The regulator should give an apple to apple comparion based on the insurance value and the duration of the policy.

Sagar Shah

6 years ago

This article was surely an eye opener for many people including me who fall to prey to intelligent advertising.
After investing in ING and ICICI and burning my fingers while surrendering the same for cash value, i realised that it is wiser to stick to the big daddy of the industry namely LIC.
LIC may be slow, it may be lethargic and it may be orthodox but it is surely not a faceless cheat like many private insurance companies.

Kamlesh Khanchandani

6 years ago

While your subject line is quite catchy, it seems that you have very little knowledge and information regarding the captioned subject in the first place. As rightly pointed out by you, insurance claim settlement is subject to the customer providing the right and complete information about him/herself. This is important for the customer him/herself and also important for being true to his/her own family. When one does lie in the porposal form, he/she is not cheating the company but he/she is cheating his/her own future and his/her own family. AEGON Religare or for that matter any Insurance company would have done the same thing in this case. Also, looking in percentage terms for a company with such a small base is meaningless and this comparison must be done amongst peers i.e. ICICI Prudential vis-a-vis HDFC Life etc. etc.

Secondly and most important, each policyholder is free to approach the ombudsman, regulator or courts for that matter in case if any unjustification has been done by the company. In this case, pls investigate further and find if the company has any such pending cases and you will get an answer. And please enlighten us as well as we would like to know some actual research work and not a copy paste from IRDA website. Even we can do that. Pls do your research well and don't mislead the poor common man who anyway doesnt understand these things. And thanks to such articles, people are bound to still further stay away from Insurance. Jago India Jago.



In Reply to Kamlesh Khanchandani 6 years ago

While your have hurled a lot of harsh words in anger (you are clearly a company person), there is zero substance in what you are saying. Most imprtantly, you seem to be living in a different planet and have never heard of mis-selling by agents. You have never come across cases where agents have misled customers by saying that even if your name is spelt wrong or age is written wrong, its ok “I am there”. You have never come across cases of insurers rejecting claims on frivolous grounds. The article is not saying that the customer is right or wrong.
Your arithmetic is a little rusty, I guess. If it had said LIC had so many lakhs of claims repudiated that would be misleading. In your hurry to lecture, you have uttered some nonsense. For your information, absolute number would be misleading – not percentage. Since you are unable to calculate sensibly, here is some education for you: the percentage figure will NOT be high because the base is low and the company is new. Rather the absolute figure would look high if the base is large if the company is older.
If you have something to add to the debate please do so. Don’t make stupid arguments and expose your ignorance about one of the few articles that exposes the insurance industry. Congrats Moneylife team. Please continue the good work and don\'t get dejected by vested interets

Sunil Arora

6 years ago

I understood that a life insurance claim cannot be repudiated after policy having been in force for 2 years whether there was full disclosure of pre-exisitng ailments or not. It is a scary picture if the life insurance companies are following the same philosophy as general insurance companies of outright denying the claims leaving the insured to fight it out at Ombudsman. Most people give up and just curse these companies.

I also want to know if you gave an opportunity to these companies to present their case to you?


Monylife Team

In Reply to Sunil Arora 6 years ago

Yes we did. They did not respond. They are not in touch with Moneylife for any information sharing. They have the big media with them :)


In Reply to Monylife Team 6 years ago

Is it possible to compare claim settlement data for different insurance companies in each claim yearby:
a.) size of the policy (sum assured)
b.) period of time the policy was in force before claim

Aegon obviously seems to be doing very poorly, but we also want to see the performance of others in policies similar to those being issued by Aegon. I am looking at buying a term insurance policy soon, and would like to go with the best insurance provider I can find.


6 years ago

Great eye opener. Also none of the companies advertise term policies, if marketed the kam insurance leneki bimari will automatically disapear. Also using insurance as a saving tool is stupid. None of the insurance companies (Forget ULIP) having other varities of insurance give a return exceeding 4%, which is taken away by inflation. Ask aerogon if they will take a term policy of 20 times the annual salary?


6 years ago

buying insurance is our responsibility. somewhere we have to keep faith in these people. the biggest curse is our own IRDA. they being the regualatory authority should show some spine. these insurers are operating in western countries, where they can't get away like this. i myself had forwarded complaints regading some insurers (life as well as non life), but they hardly responded. if this is the way IRDA handles the complaints why blame insurers. they are even more emboldened and with our snail pace judiciary it will be always a sorry story to tell. my expeirence with this online insurers are very bad. you can't do anything even for their unresponsiveness. go to IRDA if you want (kya kar lega).

raghavan gopalathatham

6 years ago




In Reply to raghavan gopalathatham 6 years ago

31 repudiation out of 81 is 38%, which is extremely high

Kamlesh Khanchandani

In Reply to Sonam 6 years ago

Guys.. pls dont look at these numbers in isolation. No company wants to cheat its customers as it will anyway not survive. There is a regulator watching these activities and all of this is reported to them. There could be genuine reasons why claims are rejected. I have worked in Insurance companies and i have seen cases wherein customers dont disclose the fact that they are suffering from cancer etc. and when finally they die, the claim is bound to be rejected. The very simple rule here is that as a company, i may have either refused giving cover to such a customer as he/she is high likely to die because of such disease or atleast i may have asked for a higher premium to compensate for the higher risk. The Key point here is that it atleast would have been a conscious call by the company to accept the policy. but when no such information is provided, company issues the policy without having any knowledge and hence the insurance contract itself is void in the first place. So instead of blaming the insurance companies, we should blame ourselves for having to go through this.


In Reply to Kamlesh Khanchandani 6 years ago

Please don't lecture about corporate practices, regulators and grievance redressal mechanism in India. You seem to be clueless about how all financial services companies are aggressive in pushing wrong products the wrong way, aided by cut throat distributors, mainly big banks. Its all about meeting steep sales targets, customers be damned. The less said about the regulator the better. Do you know that there is something called insurance ombudsman. Do you know how many cases this office has dealt with and how many have gone in favour of customers. You seem to be living in an ideal world. Dont spread pro-industry propaganda to this audience without any evidence. We know better.

anju chugh

6 years ago

can you claim settlement ratio of other companies like Birla life, SBI life< Kotak Life and Bajaj Life

Krishnaraj Rao

6 years ago

A real eye-opener. Thanks!!!


6 years ago

The truth, as usual, from Moneylife, when the big media companies will never write something like this for fear of losing revenues. Congrats


6 years ago

without providing any details or any research on WHY aegon has repudiated claims it is mere speculation. the shrill advertising aside,is it a problem to advertise insurance? whats your point?
second,you've been fooled by statistics.older insurers have a better claims settlement ratio and new insurers by definition have a higher repudiation ratio.thats the nature of the beast.any claims made within the early term of the insured,is subject to thorough investigation for fraudulent claims.a new insurer by definition,has all claims falling in that suspicious period.

it would have been better if you had asked aegon WHY it is high.i didnt see any anecdotal evidence even of an unfairly rejected claim.
what moneylife's team is doing here is speculating and speculating like an amateur.get professional fellas



In Reply to pravin 6 years ago

In response to this article, let the Company comment and justify.
What this article DOES open our eyes when it comes to choosing an insurance company. Data is from IRDA and irrefutable.

shanta ramaswamy

In Reply to pravin 6 years ago

Does the insurer agree with Mr Varma? If what he says is true -- the message that I get loud and clear is to avoid all new insurance companies (which means all the private ones with foreign collaborations) like the plague -- they are bound to repudiate your claim, because ... 'that is the nature of the beast!'. This is useful information for me as a potential customer


In Reply to pravin 6 years ago

The article is full of data compiled by the regulator IRDA. What can be better than this? Suggesting Moneylife rely on anecdotes is foolish because it would then depend on what anecdotes you choose1


In Reply to Sonam 6 years ago

the data is moot.if you didnt want to include anecdotes,how about explaining how ratios are skewed when a new insurer starts out?

ratios mean nothing unless there is specific evidence of wrong doing.people applying to aegon are in general net savvy and shopping for cheap insurance. i wouldnt rule out some customers gaming the system to make some easy money.
any reporter making accusations or sanctimonious statements need to voice the opinion of the folks you are tirading against as well.


In Reply to pravin 6 years ago

Its a ratio of repudiation that is chilling. These are claims rejected. Its a number, not anybody's impression. Is it false? No. Is it the highest in the industry? Yes. What on earth do you mean by gaming the system? This data is from IRDA. To me its clear as a daylight.


In Reply to pravin 6 years ago

Pravin cen you explain why are you advocating here in favour of particular insurer.


In Reply to Sonam 6 years ago

Fully agree with Sonam. Article is a good compilation of IRDA data, to caution gullible masses and create awareness. @Pravin: Early claim needs to be investigated, so settlement may be delayed but why high repudiation? Private Players have a history of luring Customers with high-pitch promotion whenever a sector is opened up, since Customers are looking for an option to perceived poor services in over-staffed PSUs. Regulators are mostly indifferent (with rare exceptions like Mr Bhave). This is seen in all sectors, be it Banks, Brokerages, DPs, Telecom.. Keep up the good work MoneyLife !


In Reply to Sunil 6 years ago

without data on WHY the repudiation occured,it is mere there evidence of wrongful repudiation? are court cases piling up? lets have the data before accusing anyone

Warren Buffett bowled over by Indian hospitality

"I am just overwhelmed by the welcome I have received from the moment we got here. They treat me much better in India than they do in the United States," Warren Buffet, chairman and CEO of Berkshire Hathaway said during his interaction with the Karnataka chief minister

Bangalore: Indian hospitality on Wednesday received a strong endorsement from Warren Buffett, the world's third richest man, who said he was treated much better here than back in the US, reports PTI.

"I am just overwhelmed by the welcome I have received from the moment we got here. They treat me much better in India than they do in the United States," said the chairman and CEO of Berkshire Hathaway at a brief meeting with Karnataka chief minister BS Yeddyurappa early Wednesday morning.

"I want to transport all this... I believe in free trade," he said in a lighter vein.

"We had a great dinner last night (Tuesday night)... I met some very interesting people, had a great conversation. I couldn't feel more welcome and more delighted to be here," said Mr Buffet, who is staying at Taj West End during his visit to the country.

"This is my first trip to India and the first foot I placed on Indian soil was in Bangalore... and it won't be the last," said the 80-year-old billionaire.

"When I come back, I will be 100 in 2030," he joked, but quickly added that he planned to come back much before that and was hopeful of seeing business expand here by then.

"We want to be where the action is and the action is here," Mr Buffett, who on Tuesday admitted to having made a late entry into India, said.

Mr Buffett, who viewed a short presentation on investment opportunities in Karnataka and the Global Investors meet held in 2010, said he was impressed by the speed of implementation of the memoranda of understanding (MoUs) signed during the Investors Meet.

"... It is very impressive," he said, lauding the efforts of the Karnataka government in facilitating the establishment of a Nestle food processing plant in a short timeframe of barely 10 months.

Mr Yeddyurappa extended an invitation to Mr Buffett to be the chief guest at the Global Investors Meet in 2012 during the nearly half-hour-long meeting.

The chief minister, attired in a formal suit, briefed Mr Buffett about the investment opportunities in Karnataka, the progressive policies of the state government, the close to 400 MoUs signed at the Global Investors Meet and the speedy implementation of several of the projects.

"I invite you to invest in Karnataka in different sectors and assure you all the support and coordination from our government," Mr Yeddyurappa told the legendary investor.

To a question as to what Karnataka needs to be doing to woo more investors, Mr Buffett said, "You are doing the right thing."

Asked what his own assessment was on the impact of the Japanese crisis on the re-insurance sector, he said, "It is very early to assess that."

"Much of the loss is uninsured... It is a wild guess at this point, but I would say that it will be probably be between half a billion and a billion dollars. To put that in perspective, Katrina (hurricane) cost us $3 billion and we are much larger. It is a significant amount of money, but it is not what I call a super catastrophe from the financial standpoint," he said, but added that it was a great tragedy from the human loss point of view.


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