An insurance contract mentions the scope of the policy, conditions and enclosures. One needs to understand what his policy covers provide and what it does not, said the doyen of Indian insurance industry.
Mumbai, 22 May 2010: Moneylife Foundation on Saturday held a workshop-cum-discussion on the importance of insurance safety net. Speaking on the occasion, Mr Fali A Poncha, a veteran of the insurance industry, said, “Before buying any insurance policy, it is very important for one to read the fine prints in the policy. An insurance contract includes everything. It mentions the scope of the policy, conditions and enclosures. One needs to understand what his policy covers provide and what it doesn’t. ”
He stressed that the significance of insurance must taught at early age, especially right from the school level. He said, “Many people in India lack awareness about insurance, therefore less people have insurance. If we can teach insurance in schools, then the conscious levels on insurance will increase.”
Mr Poncha highlighted that personal accident cover is essential for individuals, however a lot of people in India do not have this cover, despite the lower costs of these policies. He stressed that people should by insurance policies like health and home insurances and be very clear of the details in the policy.
Speaking about the post-nationalisation of insurance industry, he said even today insurance policies are not sold but only bought. Insurance policies were only sold to the corporate clients, as the incentives were way to lower for individual policies.
He added that an insurance company will only interpret a policy on the time of a claim. He also elaborated on the role of ombudsman in case if an insurer has any grievance against his insurance company. He said that the ombudsman is very important for individuals as it gives the claimant a choice to go for an appeal. In addition, the claimant is not bound by the ombudsman order and can seek redressal in consumer or other court. However, corporate entities, partnership companies and cooperative societies cannot appeal to an ombudsman.
Every contract of insurance is based on a principle of indemnity with a few exceptions. He explained, that an individual should not make profit or loss from a policy-- that is--the individual cannot insure more than what he will lose. In addition, if one needs insurance, then he doesn’t need to go to an insurer or advisor. However, he needs to understand what the policy includes and what excludes.
Mr Poncha said that the experiences of the senior citizens with insurance companies are appalling. As one grew older, his health deteriorates and that is the time he requires health insurance the most. However, in India most companies do not provide for insurance or medi-claim coverage after the age of 65. Mr Poncha said the senior citizens can opt for an insurance cover that may provide certain coverage for health insurance, not necessarily higher in terms of money. State-run National Insurance Co Ltd does have a health insurance plan for senior citizens called as ‘Varistha’ that can provide a good substitute for them, Mr Poncha said.
He also said that insurance offered by credit card companies are unsafe. One should not rely on these companies for any kind of insurance, as they do not provide you with the policy details.
The conference was attended by activists, students, researchers, mutual fund distributors, financial advisors and members from the insurance fraternity.
(The views expressed by Mr Fali Poncha are his personal views and not those of the company he serves)
Arshiya International Ltd, a flagship company of the Arshiya Group, said that India's first free trade warehousing zone (FTWZ) near Mumbai, which was scheduled to be launched on 23 May 2010, has been delayed and will be launched by the end of July 2010.
Besides Mumbai, Arshiya International is also developing the country’s first FTWZs in Khurja (near Delhi) and Nagpur. The group's principal activity is to provide end-to-end services and solutions in logistics and supply chain management. It operates through three segments: logistics operations and related services, container freight station/free trade warehousing operations and related services and rail transport operations.
Arshiya International ended 2.58% down at Rs177.25 on the Bombay Stock Exchange, while the benchmark Sensex closed 0.45% down at 16,445.61 points.
After the heavy hammering last week, markets may bounce back a bit next week
The market was down 3% on a weekly basis on concerns over the Euro debt crisis affecting the global markets. Domestic indices plunged on Wednesday following the ban on speculative trading on Euro zone government bonds and certain other financial instruments. Although the market recovered on Thursday, the sentiment on the bourses was subdued as worries over the economic recovery in the Euro zone and certain economic data in the US weighed on investors’ risk appetite.
The top gainers in the BSE Sensex during the week were Larsen & Toubro (up 5%), ONGC (up 5%), SBI (up2%), ITC and Cipla (up 1% each). The top losers on the benchmarks were Tata Motors (down 13%), DLF (down 10%), Jaiprakash Associates and Sterlite Industries (India) (down 9% each) and ICICI Bank (down 8%). In the sectoral space on the BSE, capital goods and FMCG were the top gainers while metals and realty were the laggards.
The board of directors of Piramal Healthcare on Friday (21st May) announced signing of a definitive agreement with Abbott of Illinois, USA to acquire the former's domestic formulations business for a total consideration of $3.72 billion.
The deal will make Abbott the largest player in the Rs 60,000-crore domestic market, with a share of over 7%.
Of the total consideration, Piramal will receive a down payment of $2.12 billion on closing the sale and $400 million each in the subsequent four years starting 2011. The deal is expected to close in the second half of this year.
The World Trade Organisation (WTO) said that the Doha Trade talks should be pushed forward to help countries emerge from the global economic crisis. The International Monetary Fund (IMF) said that some countries should control their expenditure; however, large economies can wait till 2011. The multilateral funding agency said that the global economy needs policy support and risks exist in the system, which is clear from the Greece debt crisis. The Asian Development Bank (ADB) said that strong growth outlook and prospects for better returns will increase capital inflow in the region, however, it will also increase appreciation pressure on the currencies.
Back home, the Indian Meteorological Department (IMD) said that arrival of the monsoon is not likely to be affected due to the cyclone in the Bay of Bengal. A depression in the Bay of Bengal intensified and the country had issued a cyclone alert at ports in the eastern parts of the country on Monday.
The food price inflation picked up for the second consecutive week in early May.
It was up 16.49%, higher than the previous week’s reading of 16.44%. The fuel price index was steady at 12.33%, while the primary articles index was up 16.19% versus 16.76%. The Reserve Bank of India (RBI) said that the Greek debt crisis may have an impact on India’s trade. Meanwhile, India’s imports in April rose an annual 43% to $27.3 billion.
Germany has banned selling of naked short on euro-dominated government bonds, credit default swaps based on those bonds and shares in Germany's 10 leading financial institutions. It said that Euro zone nations must control their fiscal deficit to bring confidence in the financial market. European finance ministers on Tuesday approved new regulations for hedge funds. The European Union (EU) also plans to limit the amount of debt, or leverage that foreign-based funds can use to increase their trades and profits. The euro was down to a four-year low on the ban of naked short selling of some of the financial instruments and also on the remark of the German chancellor that the euro is in danger.
Jobless claims rose again in US for the first time since early April. Initial claims for state jobless benefits increased 25,000 last week to 471,000, the highest level in five weeks, the Labor Department said. The index of leading economic indicators slipped last month for the first time since March 2009, while factory activity in the US mid-Atlantic region accelerated less-than-expected in May. Greece said that the banning of some speculative trading in Euro zone debt indicates the determination of European leaders to defend the single currency and protect the economy.
The RBI said that the US dollar will remain a major component of India's foreign exchange reserves as most of the country's overseas trade is denominated in that currency.
The government’s $14.6 billion haul from third generation (3G) auction is likely to increase the short-term interest rate as auction winners pay up from their accounts, draining out money from the banking system. However, the bounty is expected to help the government control its high fiscal deficit. Combined with the proceeds of an upcoming auction of broadband wireless spectrum, the government could raise a combined Rs921 billion ($19.7 billion) from selling the rights to its airwaves.