MCX awaits rules on trading in commodity options and indices

The amendment in the FCRA would allow the bourse to expand its product range by offering trading in real estate indices and futures and options on rainfall based-products, MCX MD and CEO Lamon Rutten said on Friday

Ahmedabad: Multi Commodity Exchange of India (MCX) on Friday said it hopes that the proposed amendments in Forward Contract Regulation Act (FCRA) for allowing trading of options and indices in commodities will be soon passed by Parliament, reports PTI.

A Parliamentary Standing Committee, reviewing amendments to the FCRA, has already submitted its report, permitting index derivatives (futures and options) and options in individual commodities.

It has also recommended independence and power to the regulator—Forward Markets Commission (FMC).

“We hope that Parliament will approve recommendations of the standing committee that allows trading of options and indices in commodities,” MCX MD and CEO Lamon Rutten told reporters here while announcing that its initial public offer (IPO) that will hit the market on 22nd February and close on 24th February.

The amendment in the FCRA would allow “us to expand our product range by offering trading in real estate indices and futures and options on rainfall based-products”, he added.

Mr Rutten said MCX has tie-ups with firms providing weather and real estate related data.

MCX plans to expand network by providing innovative products and introducing new revenue lines such as data vending, he added.

MCX, which aims to raise Rs663 crore, has set a price band of Rs860 to Rs1,032 a share for the IPO.

The offer would comprise of sale of about 64.27 lakh shares, accounting for a 12.6% stake in the company.

This would include 2.5 lakh shares reserved for employees.

Besides the promoter, Financial Technologies (India), shares would also be sold by other shareholders like State Bank of India, Corporation Bank, Bank of Baroda, ICICI Lombard General Insurance, GLG Financials Fund and Alexandra Mauritius in the IPO.

MCX is the largest commodity bourse in the country, with more than 80% market share.

It is the fifth largest commodity exchange globally and figures among the top two positions in gold and silver segments.

It would be the first exchange in India to go public, putting it on par with global markets like the US, the UK, Japan, Australia, Singapore and Hong Kong.

MCX had recorded Rs447.5 crore income and Rs176.2 crore of net profit in the fiscal year ended 31 March 2011.

In the current fiscal, the company has posted a net profit of Rs218 crore and total income of Rs474 crore for the nine-month period ended 31st December.

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Bharti AXA iProtect—Online term life insurance hits a new price bottom

There is a new insurance product using the iProtect brand name in the market. ICICI Pru Life has one and now Bharti AXA Life has used the very same product name. The premium is cheapest offered so rar, which means that price war between insurers is still hot. The Bharti product is a good deal for non-smokers, but a little expensive for smokers

The Insurance Regulatory and Development Authority (IRDA) has allowed the same product name for new a term life insurance plan. iProtect is a product from ICICI Pru Life and now Bharti AXA Life has launched a product with exactly same name for its online term life insurance. IRDA has done this in the past, too, but it is rare to have the same product name from different insurers. Is it intentional copying of the product name? We don’t know.

Bharti AXA Life iProtect is now the cheapest online term life insurance plan for non-smokers. There is a wide difference in the premium between smokers and non-smokers. The premium for Rs50 lakh Sum Assured (SA) for a 27-year old non-smoker male based in Mumbai for a policy term of 25 years is Rs3,700 (excluding taxes). On the other hand, the premium for a smoker in the same case will be Rs6,150 (excluding taxes).

Recent entrants DLF Pramerica U-Protect and Edelweiss Tokio Life Protection have premiums which are the lowest in offline term plan space. Their premium are Rs5,956 and Rs5,984 respectively for similar parameters. Both the products are offline as of now.

Aviva i-Life was the cheapest term life insurance till now with the revamped Aegon Religare iTerm closing the gap. HDFC Life Click2Protect was recently launched to compete in the online term market. The much-awaited online term plan this year will be from LIC, which is is expected to hit the market soon.

Advantages of Bharti AXA iProtect

  • Cheapest term life insurance
  •  For SA above Rs50 lakh, premium discount is given
  • This policy offers reduced premium for non-smoking policyholders
  • Family care benefit: This benefit becomes applicable after premiums for two consecutive years have been paid. Under this, a part of SA equal to Rs1 lakh is provided to the nominees within 48 hours of submitting all the required claim documents. The 48-hour time limit is subject to some conditions like working day, etc
  •  The press release specifies no medical test till Rs50 lakh, however, the brochure silent on the medical test

Disadvantages of Bharti AXA iProtect

  • The maximum age at maturity is 60 years. Many other plans are available till the age of 70 to 75 years.   
  •  Policy term can be for 10, 15, 20, 25 and 30 years. E.g. A policyholder of 42 years will be offered a maximum policy term of 15 years which will end when the person is 57 years. It will not be easy to get another term plan from another insurer at that age.
  •  Minimum sum assured is Rs25 lakh
 
Online term life plan options for Rs50 lakh sum assured for 27-year old non-smoker male based in Mumbai for policy term of 25 years. Premium inclusive of taxes

ICICI Pru Life iCare has tried to address the major hiccup with the online term insurance buying process. The medical tests which online term insurance products require for all (or higher age groups) has been done away with this innovative product. There were issues like premium hike after medical tests which used to catch customers by surprise. This one-of-a-kind product will have no medical tests and no surprises of premium hike. This is an online term plan in the complete sense.

The question is whether an online sale without any agent makes up for such a gigantic difference in the premium? It cannot justify the enormous variation; even though that’s the standard answer you will read or hear from the insurance company. Is there an assumption of the online buyer living a healthy lifestyle, having access to proper healthcare and hence will live longer? Time will tell if the assumptions stand true. The mortality experience of the product will tell if the premiums collected are enough or the insurance company has a hole in its pocket.

You may also want to read:

HDFC Life Click2Protect—an online term life insurance @50% discount

Online term life insurance – Race to the bottom?

Online term plans
 

 

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COMMENTS

Dharmesh Kumar

5 years ago

Term Plan

misrilal k

5 years ago

it very good policy in fact iam intrested to know some more details about the policy can you send our excecutive to meet me 9948720718

Madhusudan Thakkar

5 years ago

Raj....Looking Good....Excellent analysis ...One of the best piece of yours...Keep it up...Only ML can do such in depth analysis....Thank You

REPLY

raj

In Reply to Madhusudan Thakkar 5 years ago

Thanks, Mr. Thakkar

Madhusudan Thakkar

In Reply to raj 5 years ago

Aaisa piece lik ke aap agent community ka kya chuthe kaarana chate ho...Raj Saab?.....LOL...This piece is written without FEAR or FAVOUR to any company.....Keep up the good work under guidance of Sucheta Ji & Debhashish

raj

In Reply to Madhusudan Thakkar 5 years ago

thank you. hope you like the Moneylife cover story has came in the market today. Read it.

RAJESHWAR REDDY

5 years ago

The purpose of taking the term insurance is to support the family in that particular persons absence.what is the use if the companies reduce the premium and as well as reduce the claim settlement ratios? Only LIC where agent is the mediator will solve this purpose.The figures prove this as per the IRDA Report.

REPLY

raj

In Reply to RAJESHWAR REDDY 5 years ago

LIC does have best settlement ratio. Insurance companies who are in business for short time will not have high settlement ratio as early death claims (within three years of taking policy) are scrutinized more by all insurance companies including LIC. As the insurance company grows old, these ratios are supposed to improve.

Read our cover story on term plans http://moneylife.in/article/online-term-...

RAJESHWAR REDDY

In Reply to raj 5 years ago

Then how come 2 companies which are started in the same year 2000 have different claim settlement ratios.Example : HDFC and Max New York which have 91.14% and 65.51%

raj

In Reply to RAJESHWAR REDDY 5 years ago

Read again. I have written that these ratios are SUPPOSED to improve.

Max New York...we had already written about it. Read http://foundation.moneylife.in/article/m...

B V Vijaya BE CIS

5 years ago

You haven't mentioned the premium of LIC of India which makes your article more biased to Pvt. Insurers. LIC happens the biggest Insurer in India with Highest Claim Ratio in the World. Side by side you should have mentioned the claim ratio of all companies too which is a major parameter.

REPLY

raj

In Reply to B V Vijaya BE CIS 5 years ago

The article is for online term life insurance. LIC does not have online plan till now.

How can you say that the article is biased to private insurers? It mentions that the low premium pricing for online term plans is based on assumptions which only future will tell if it holds true.

If you want to read about settlement ratio and many other details, please read http://moneylife.in/article/online-term-... It is a cover story which is on the home page of the Moneylife website under Moneylife Essentials. How did you miss it?

There are also many other short articles on latest settlement ratio, etc. You have to do search on Moneylife website if you want to read on different aspects of life, health and auto insurance.

Don't expect a news article to give you information on all aspects of life insurnace industry.

Government moves SC seeking review of Vodafone tax verdict

The Government is seeking review of the apex court's decision which said the I-T department does not have jurisdiction to levy tax on the overseas deal between two companies

NEW DELHI: The Union Government on Friday moved the Supreme Court seeking review of the apex court's verdict in the Vodafone tax case. The SC had said that the Indian Income Tax Department does not have jurisdiction to levy Rs11,000 crore as tax on the overseas deal between Vodafone International Holdings and Hutchison Group, reports PTI.

The Court had on January 20 allowed Vodafone's appeal and had quashed the Bombay High Court verdict which had upheld the decision to levy tax on the overseas deal.

The apex court held that Vodafone's transaction with Hong Kong-based Hutchison Group was a "bonafide" foreign direct investment (FDI), which fell outside the tax jurisdiction of the Indian authorities.

A bench headed by Chief Justice SH Kapadia had held that the offshore transaction was a "bonafide structured FDI investment" into India which fell outside India's territorial tax jurisdiction.

It also asked the I-T Department to return Rs2,500 crore deposited by Vodafone, in compliance of its earlier interim order, within two months along with four per cent interest from the date of withdrawal of money by the tax department.

It also asked the Supreme Court registry to return within four weeks the bank guarantee of Rs 8,500 crore given by the telecom major.

Through the $11.2 billion deal in May 2007, Vodafone bought 67% stake in the Hutchison-Essar Ltd (HEL) from Hong Kong-based Hutchison Group through companies based in the Netherlands and Cayman Island.

Meanwhile, Vodafone in a statement, said that the apex court had clearly and unambiguously ruled that there was no tax to pay on the Vodafone-Hutchison transaction.

"Vodafone notes the filing of the tax authorities review petition, which will be evaluated by the same bench that ruled on the case and has no further comment to make at this stage," it said.

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