IRDA guidelines for corporate agents of non-life insurance companies

IRDA had in February this year asked non-life insurers to lay down minimum business requirements for agents, which would be monitored on a regular basis. It had said that insurers shall monitor the compliance of these guidelines by agents through appropriate software

New Delhi: The Insurance Regulatory and Development Authority (IRDA) on Wednesday said corporate agents of non-life insurance companies would also come under the guidelines for the minimum business requirements for general agents, reports PTI.

“The said provision of Minimum Business Requirements is now being extended to all corporate agents engaged with non-life insurance companies for soliciting the insurance business,” IRDA said in a circular.

IRDA had in February this year asked non-life insurers to lay down minimum business requirements for agents, which would be monitored on a regular basis.

It had said that insurers shall monitor the compliance of these guidelines by agents through appropriate software.

The regulator had at that time also said that employees of non-life insurance companies cannot engage their relatives as agents.

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Not a single issue hit the primary markets in October

Geojit BNP Paribas research head Alex Matthews said various companies went for IPOs and public issues in August and September, but they performed badly and the IPOs were at below offer price. So, in October companies were cautious

Mumbai: The quantum of funds raised by India Inc through initial public offers (IPOs) and rights issues fell to zero in October this year as not even a single issue hit the market in the month, reports PTI.

“During October 2011, not a single issue hit the primary market compared to Rs3,029 crore raised in September 2011,” according to the latest ‘Capital Market Review’ by market regulator Securities and Exchange Board of India (SEBI).

Commenting on the lull activity in the primary market, Geojit BNP Paribas research head Alex Matthews said private equities and foreign institutional investors (FIIs) are not brining fresh funds due to the slowdown in the US and Eurozone.

He said various companies went for IPOs and public issues in August and September, but they performed badly and the IPOs were at below offer price. So, in October companies were cautious, he added.

Corporates had raised a total of Rs3,029.10 crore through a total of 12 issues, including nine initial public offer (IPOs), in September.

“The cumulative amount mobilised for the financial year 2011-12 so far stands at Rs16,342 crore through 46 issues as against Rs38,388.7 crore through 52 issues during the corresponding period in 2010-11,” SEBI said.

It said that only one Qualified Institutional Placement (QIPs) took place in October which raised Rs40 crore. In the previous month, there were no QIPs.

Preferential allotments witnessed a decline in October 2011, with 18 such allotments raising a total of Rs417 crore.

In comparison, 25 preferential allotments were executed in the primary market in September, which raised a total of Rs499 crore.

After a period of volatility, the stock market witnessed a lot of volatility in October, even though the benchmark Sensex gained 8.9% during the month.

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IATA asks India to set airline industry free by slashing taxes

“The service tax on tickets, the high jet fuel prices due to taxation which account for 45% of the Indian aviation industry’s cost in comparison with 30% for airlines in other parts, should be reduced or eliminated,” IATA director general and CEO Tony Tyler said

Geneva: Global airlines body International Air Transport Association (IATA) today asked Indian government to set the country’s aviation industry free by expeditiously reducing taxes, especially those on jet fuel, instead of “micro-managing” the cash-strapped sector, reports PTI.

“The service tax on tickets, the high jet fuel prices due to taxation which account for 45% of the Indian aviation industry’s cost in comparison with 30% for airlines in other parts, should be reduced or eliminated,” IATA director general and CEO Tony Tyler said here.

“Indian government should focus on safety, security and commercial freedom of the industry and not indulge in micro-management of the industry through (checks) on ticket pricing,” he told the global briefing of IATA here.

“We urge the Indian government to set the aviation industry free (from policy interventions like checking airfares). Concentrate on building infrastructure and the air navigation system. There is a lot the Indian government can do,” he said, adding that the state taxes on jet fuel were having “a significant drag on the Indian carriers”.

In India, the aviation industry contributes 5% of the gross domestic product (GDP), around Rs291 crore in tax contributions, provides four million jobs and another seven million jobs through tourism and related activities, he said.

“We hope these numbers will have a good impact on government policies,” Mr Tyler said in reply to questions. “We have good relations with the Indian authorities and are seeking to persuade them of the benefits that can be derived from the civil aviation industry.”

Maintaining that the Eurozone crisis was bound to hit the markets in Asia and other parts of the world soon, the IATA chief warned of deep losses for the global airline industry next year if the European economic situation continued to be grim.

In the context of high taxes on the aviation industry, Mr Tyler said “cash-strapped governments implementing austerity measures are seeing aviation as a soft target for new or increased taxation...”

Understanding that aviation’s connectivity is the lifeblood of the global economy should lead politicians to make it cost efficient as possible in order to reap the economic benefits that it facilitates.”

Giving an example of the Netherlands, Mr Tyler said the Dutch government which had raised Euro 300 million though passenger departure tax, repealed the tax when they found that “it cost the economy Euro 1.2 billion in lost economic activity. Other governments should take note”.

Regarding capacity building and infrastructure, the IATA chief said some governments saw privatisation as a solution, but “we are agnostic on whether a facility is government owned or in private hands. What is important is the regulatory structure, it must follow the International Civil Aviation Organisation principles especially transparency and consultation with users”.

IATA’s chief economist Brian Pearce said the Asian region was the weakest in air freight markets this year as the Asian economies were witnessing a fall in demand from developed economies for goods manufactured in Asia.

Asia-Pacific airlines have seen a sharp fall in profits because of the importance of cargo in the region, he said.

Mr Pearce said the IATA forecast for 2012 was that the high jet fuel prices and a weakening economy would lead to lower airline profits next year, “We forecast a fall in net post tax profits from $6.9 billion in 2011 to $3.5 billion in 2012”.

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