Insurance
Insurance saw major boost for regulation, foreign equity
Experts said from a regulatory standpoint, 2015 would count as a turning point for Indian insurance
 
The passage of the insurance bill to give more power to the watchdog and permit 49 percent foreign equity was 2015's highlight for the $60-billion industry in India that can help in expanding the reach of this crucial social security beyond the current 3.8 percent.
 
"I would look at 2015 as a year of change and optimism," said G. Srinivasan, chairman-cum-managing director, New India Assurance Company.
 
"The passage of the Insurance Laws (Amendment) Act has brought in a lot of changes like the FDI (foreign direct investment) cap going up, foreign re-insurers being allowed to set up branches and a number of regulatory changes being ushered in," Srinivasan told IANS.
 
"It has also been a busy year for the industry. There have been several regulatory changes that will have a lasting impact on how the industry develops from here on," added Anup Rau, chief executive and executive director, Reliance Life Insurance Company.
 
Experts also said from a regulatory standpoint, 2015 would count as a turning point for Indian insurance -- which is expected to quadruple in size from $60 billion now over the next 10 years, with a $160-billion market for the life segment.
 
"There have been quite a few regulatory changes either already brought in after amending the insurance law or likely to be introduced shortly," said Srinivasan, pointing towards areas such as changes in the norms for expense management, solvency, investment and reinsurance.
 
The insurance industry, and more particularly the life insurance sector, expects the corporate agency regulations to allow banks to work with multiple insurers to provide access and choice to the majority of the population.
 
Though the amended insurance law allows FDI of up to 49 percent, announcements on stake hikes by foreign partners have been coming in slowly. In the life insurance sector, there have been a couple of announcements while in the non-life sector not much is being heard on the topic.
 
Nippon Life has already signed definitive documents to increase its stake in Reliance Life to 49 percent; so have Tokio Marine, Axa, AIA Life, Aegon and Sun Life in their respective joint ventures.
 
In the non-life side, Bupa has announced its decision to hike its stake to 49 percent in its Indian health insurance joint venture.
 
"There are several modalities that need to be worked out before any stake increase discussion can be concluded. The situation cannot be generalised to say that the foreign partners are not keen to increase their holdings," Rau said.
 
Yet, Srinivasan expects many foreign partners to hike their stakes in their Indian ventures over the next few months as the issues on Indian management and control and valuation of the companies are fairly settled now.
 
Speaking about the market trend, New India's Srinivasan said the commercial segment has grown lower while retail has continued to drive the sector's growth. This trend is the same for the industry.
 
According to Rau, for the life insurers, unit linked insurance policy (ULIP) is the flavour of the year. The private life insurers are logging around 16 percent growth this fiscal, primarily driven by growth of bank promoted insurers and ULIP sales.
 
Rau said evaluating the distributor remuneration is one the major areas to be looked into by the regulator. The were some misses as well. Rau cited as the major one the inability to get the individual agency back to the growth path.
 
The insurance law, post amendment, also allowed for appeal against the regulator's orders.
 
Now as the insurance business rides on the growth path, the next sector that is expected to get the industry's attention is the pension sector. This industry, too, is seeing some action. The foreign equity norms for the insurance industry also, by default, applies to this sector.
 
All states, barring Tripura and West Bengal, have all notified their National Pension System, with registered subscribers.
 
Highlights of the year:
 
* FDI limits raised to 49 percent in insurance and pension sectors
 
* Insurance companies to be under Indian management and control
 
* Life insurance claims cannot be repudiated three years after inception
 
* Nuclear insurance pool with a corpus of Rs.1,500 crore ($224 million) set up to cover the risk of public liability
 
* Securities Appellate Tribunal (SAT) for appeals against insurance regulator's orders
 
* SBI Life Insurance Company is first insurance company to approach SAT against insurance regulator's order to refund Rs.275 crore to its policyholders
 
* Host of companies in life insurance line up to hike stakes in Indian ventures.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

Aamcha Sexun Nahi!
There is what is called jurisdiction. It means the area over which a court of law has the authority to hold sway
 
Many of our readers, their friends, clients or acquaintances, must have heard this line. Translated into acceptable English from Marathi, it means, ‘not our Section’. In other words, ‘Get lost. You have come to the wrong place’. Many a poor folk takes this response as the final answer. Unfortunately, it is not only the police who mouth this famous phrase. Many litigants also find solace, or rather loopholes, and exploit them. How does that work?
 
There is what is called jurisdiction. It means the area over which a court of law has the authority to hold sway. The correct appellation is ‘Territorial Jurisdiction’, as opposed to ‘Pecuniary Jurisdiction’. Territorial Jurisdiction demarcates an area where one can file a case. The guiding principle is called ‘the cause of action’, the cause being the legal problem that has been created by someone for the person affected. The origin of the problem is the place that determines the correct court, jurisdiction-wise.
 
There is a book of rules for lawyers, called The Code of Civil Procedure, 1908. Or simply the CPC. It contains a Section on the subject of jurisdiction. The subject matter has to be of a civil nature, a determination of the rights of the parties, maybe on land ownership, use, or maybe on monies owed.
There is another Code. The Code of Criminal Procedure, 1973. The Code is much older but the revision date holds good. It deals with crime. From simple abusing, to heinous murder, rape or genocide. Here, again, jurisdiction is important.
 
You be the judge.
 
A) Mr A buys a refrigerator from a shop in a small town. The shop is a branch of a very big concern having its head office in Mumbai. There is some dispute and the company files a suit in Mumbai. Is it right in doing so?
 
B) Mr B steals money from an ATM in Mumbai; next, he robs another ATM, of the same bank, in a town in Gujarat. Next, he breaks into an ATM in a village near Delhi. He is caught and found to be a resident of the village. Where can the bank institute criminal proceedings? The village, Delhi, Gujarat or Mumbai?
C) A woman from Telangana is married in Punjab where her husband has a home. The marriage takes place in Punjab. Things sour; she returns to her native place. The husband then files for divorce, in Punjab. Is he right in doing so?
 
The answer to A) is determined by the convenience to Mr A. Since he bought the refrigerator from a shop in his town, and which town has a branch of the plaintiff, the correct court of jurisdiction will be nearest the town, not Mumbai. The poor man cannot be put to loss of time, money and energy. A recent judgement of the Supreme Court in IPRS vs Sanjay Dalia, makes interesting reading on this point.
 
The thief, in his escapade from Mumbai to his native muluk, can be charged in any of the places mentioned; but convicted for all robberies on separate counts.
 
The estranged wife has an option. The husband, in spite of the fact that the marriage took place in Punjab, would have to go to Telangana; if his wife sought him to. This bending of the jurisdictional rule is to ensure less harassment for women. We believe it is correct.
 
Inter-country jurisdictions have a life of their own and would be too extensive to discuss here. Suffice it to say that the question of jurisdiction is important.
 
Then, there is the aspect about the court of lowest jurisdiction. It means that one has to approach the subordinate trial courts first, whenever possible, especially in terms of pecuniary jurisdiction. For example, the Bombay High Court now entertains suits of over Rs1 crore. For less than that, one needs to approach the city civil court. Similarly, for criminal matters, different courts have varying authority, depending on the gravity of the crime.
 
So, check the jurisdiction first. Do not rush to the High Court, no matter what the advice. You will be asked to take your papers elsewhere.
 

User

COMMENTS

Meenal Mamdani

1 year ago

The author is to be commended for clarifying a point of law. As he points out, often this reply suggests callous disregard of the complaining party. This explanation will help plaintiffs understand the validity of the response.
All the same, the same reply can be given in a more sympathetic manner, with an easy to understand explanation, assuaging the feeling of rejection and despondency of the plaintiff. But officialdom rarely bothers to exert charm for a non-VIP.

India better placed than peers over US rate hike: Fitch
India is better placed than many of its peers after the American central bank - the US Federal Reserve - raised its key interest rates, said credit rating agency Fitch Ratings on Thursday.
 
"India is not immune to potential general emerging market jitters related to the Fed lift-off, but it is better placed than many of its peers for a number of reasons," Thomas Rookmaaker, director, Sovereign Ratings, Fitch Ratings was quoted as saying in a statement.
 
According to him, firstly India's external balances have significantly improved since mid-2013, with foreign exchange reserves rising by some $65 billion to $353 billion as of November 2015 and the current account deficit narrowing.
 
Secondly, India is less dependent than several of its peers on commodity exports, and has thus not been negatively affected by the global rout in commodity prices, he added.
 
"Only a small part of India's sovereign debt is held by foreigners or is denominated in foreign currency. Fourth, India's favourable economic growth outlook makes India relatively attractive for foreign investors," he added.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)