IRDA has proposed the lead insurance model on the basis of geography, similar to banking industry in order to give emphasis on availability of various services in one particular zone
Mumbai: The Insurance Regulatory and Development Authority (IRDA) on Monday said it is mulling to follow the lead insurance model based on geography, which is presently followed by the banking industry known as 'lead banking model', reports PTI.
"IRDA has proposed the lead insurance model on the basis of geography, just like the banking industry," IRDA Chairman J Hari Narayan said at an Assocham summit.
He also said the regulator is waiting for feedback from the life insurance and non-life insurance council on this issue.
In the banking sector, lead bank model is followed in specific geographies in order to give emphasis on availability of various banking services in one particular zone, which the regulator is considering to replicate.
When asked about increase in cap of FDI in the insurance sector, the IRDA Chairman said, the industry needs a lot investment for future growth. "So, we will welcome the steps to increase the FDI in insurance sector," he added.
Talking about approval of pension products, Hari Narayan said those filed by companies are not pension products.
"They may call it pension product. It’s much like a mutual fund products. That is you make a periodic investment and you can pull back at any point of time. So, these products will not be approved. What we have said is that a pension product should have an annuity. So product without any element of pension will not be approved," he explained.
Hari Narayan further said the finance minister had met with select insurers earlier in September, in which the insurers had suggested some measures for the growth of life insurance industry.
"So, there are a list of issues, which will be further discussed in another meeting with the Finance Minister on Wednesday, like income tax, service tax. We believe that certain tax measures will be helpful for the growth of the industry," he said.
Referring to draft guideline on product design, he said, it will be sent to the Life Council in 2-3 weeks.
The regulator also pointed out its concerns relating to next growth areas in general insurance industry in the wake of slowing motor insurance segment coupled with reducing margins in health insurance.
He, however, said motor pool, which is one of the highest loss making segment of general insurance industry, will stop bleeding by next year.
Talking about bancassurance, he said, one is to one agency system (one bank selling products of one insurance company) is as per the law, however, banks can work as insurance brokers to sell products of multiple insurance companies.
Hari Narayan also stressed on rationalisation in commission structure, saying that management cost should be reduced.
S&P said lack of monsoon has affected India. In addition, more cautious investor sentiment globally has seen potential investors become more critical of India's policy and infrastructure shortcomings, the ratings agency said
New Delhi: Ratings agency Standard and Poor's (S&P) has lowered its growth forecast for India to 5.5% for this fiscal, from 6.5% projected earlier, citing "volatile" global economic situation and lack of monsoon, reports PTI.
"The lack of monsoon rains has affected India, for which agriculture still forms a substantial part of the economy. Additionally, the more cautious investor sentiment globally has seen potential investors become more critical of India's policy and infrastructure shortcomings," said Andrew Palmer, credit analysts, S&P.
According to S&P, Asia-Pacific is feeling the pressure of ongoing global economic uncertainty and it has lowered India growth forecast by one percentage point to 5.5% for this fiscal from 6.5% earlier.
Moreover, "global investors have become more critical of India's policy and infrastructure shortcomings which was recently highlighted by the power outage in early August that affected 20 of India's 28 states," the report added.
The report, however, did not mention anything about the recent reforms push by the Indian government.
Last week, the government effected a steep 12% hike in diesel prices and capped subsidised cooking gas to consumers. Besides, it allowed foreign direct investment (FDI) in multi-brand retail, aviation, broadcasting and power exchanges.
S&P said Asia Pacific economies are witnessing cautious growth conditions and any worsening of the economic conditions in the euro-zone will increase contagion risk for the region as these economies are "sensitive" to capital flows and trade.
"A trifecta featuring a slowdown in China, ongoing troubles in the Eurozone, and a weaker recovery in the US leads us to forecast slower economic growth rates for Asia Pacific," S&P said.
According to S&P credit analyst Andrew Palmer, "Any worsening of the economic conditions in the Eurozone will increase contagion risk for Asia Pacific, given the region's--particularly the open economies'--sensitivity to capital flows and trade."
S&P has lowered the base case forecasts of 2012 real GDP growth by about half a percentage point for some countries, with China's revised to 7.5% (from 8%); Japan to 2% (from 2.5%); Korea to 2.5% (from 3%); Singapore to 2.1% (from 2.5%); and Taiwan to 1.9% (from 2.5%).
Earlier this month, Morgan Stanley had also lowered India's growth forecast to 5.1% for the current fiscal from its earlier estimate of 5.8%; HSBC - 5.7% from 6.2% and Standard Chartered to 5.4% from 6.2% projected earlier.
The growth rate in the first quarter (April-June), according to the data released by the government, has slipped to 5.5%, from 8% in the same period last fiscal.
Tata Power Delhi Distribution has been asked to pay Rs19,000 for failing to provide electricity connection to a consumer within 30 days
New Delhi: Delhi Electricity Regulatory Commission (DERC) has imposed a penalty of around Rs19,000 on Tata Power Delhi Distribution Ltd (TPDDL) for failing to provide electricity connection to a consumer within the prescribed time limit of 30 days, reports PTI.
The order by DERC, which is a quasi-judicial body, came in response to a petition filed against TPDDL by Vijender Kumar Sharma, a resident of Tri Nagar in East Delhi.
In the order, the DERC said Sharma had applied for a new connection on 3 September 2011, and as per Delhi Electricity Supply Code and Performance Standards Regulations, 2007, it should have been provided within one month of filling of the application.
The Tata Power-backed company has been asked to pay a fine of Rs15,000 to DERC and an amount of Rs4,158 to the complainant as compensation.
When asked, a TPDDL official said the company would fully comply with the DERC order.
As per the order, Sharma was given the connection on 17th January -- 99 days after filling of the application -- which is a violation of the provisions of the laid down norms.
The DERC said as per the regulations, an application is deemed appropriate if no deficiency was intimidated to a consumer within three days of receipt of the same.
Though the time limit for giving connection to an applicant is 30 days, the maximum time frame in the case should have been 37 days of filling of the application as the complainant delayed paying the required fee by a week, said the DERC in its order dated 4th September.
The TPDDL argued that the connection could not be given as there were anomalies in the information and documents provided by the complainant, including failure on part of Sharma to provide translated and authenticated copy of the documents relating to title of the property and no objection certificate from the legal heirs.
The company said the applicant had completed the formalities only on 8 December 2011 and the connection was given on 17th January. It also told the DERC that some of the documents supplied by the applicant were in Urdu which delayed processing of the application.
However, DERC rejected the arguments, saying if a consumer is not intimated about the deficiencies within three days of receiving the application it will be deemed to have been accepted by the discom.