Insurance
Securities Appellate Tribunal to hear SBI Life case May 5
The Securities Appellate Tribunal (SAT) is likely to hear on May 5 SBI Life Insurance Company Ltd.'s appeal against insurance sector regulator's orders to refund around Rs.275.29 crore to its policy holders, according to the SEBI website.
 
SBI Life is the first insurer to approach SAT against Insurance Regulatory and Development Authority of India's (IRDAI) penalty order.
 
"SBI Life has preferred an appeal to SAT. SBI Life has informed of their filing appeal with SAT vide their letter dated April 6," D.D. Singh, member (distribution) at IRDAI, told IANS earlier.
 
SBI Life is a 74:26 joint venture between the State Bank of India (SBI) and BNP Paribas Cardif of France.
 
In February 2015, IRDAI chairman T.S. Vijayan directed SBI Life to implement its March 2014 order to refund Rs.275.29 crore of excess commission to the policy holders within 45 days from the date of his letter. This period expired in April.
 
Legal experts, however, questioned the company's move to approach SAT.
 
"The regulator has rightly or wrongly ordered the insurer to refund money to its policy holders. The insurer seems to have not been properly advised to approach SAT," D. Varadarajan, Supreme Court advocate and expert in insurance, company, competition law told IANS.
 
He said SAT had no statutory existence (to hear insurance cases) at the time of IRDAI's original order, that is, in March 2014.
 
The recent amendment of the insurance laws has permitted SAT to hear appeals against IRDAI's orders.
 
However, a person with insurance knowledge to hear the insurance cases has yet to be appointed to the SAT.
 
"The only course for the insurer is to challenge the regulator's direction through a writ in the high court," Varadarajan said.
 
In February, the IRDAI threw out the life insurer's contention that the regulator does not have the power to issue directions, saying Section 34 of the Insurance Act enables it to issue directions to any insurer to prevent actions that are detrimental to the interests of policy holders.
 
With regard to SBI Life's contention that the regulator's assumption that excess commission would be charged from the policy holders was erroneous, Vijayan said it lacked the logic of prudent business principles.
 
"It is the fundamentals of the business of life insurance that any expense/outgo would be loaded in the costs (read premiums). Therefore, the views of insurer are not acceptable," Vijayan told SBI Life's managing director and CEO Arjit Basu in the letter.
 
A copy of the letter was uploaded on IRDAI's website.
 
In March 2014, IRDAI ordered SBI Life to refund Rs.275.29 crore collected in excess commission to holders of Dhanaraksha-Plus Limited Premium Paying Term policy.
 
SBI Life's policy in question has two premium payment options -- single-premium and two-year premium paying plan.
 
In the case of single-premium policy, the premium for the entire policy period is collected upfront. The commission paid on that cannot be more than two percent as per the Insurance Act.
 
On the other hand, the premium under the two-year premium paying plan is slightly higher and the commission rate is 40 percent on the first year premium and 7.5 percent on the second year premium.
 
According to IRDAI, SBI Life's corporate agents -- mostly State Bank of India and its associate banks -- did not reveal to the policy holders the availability of the single-premium option and only sold the two-year premium payment plans and collected the premium for two years in advance. This was done mainly to pocket 40 percent commission on the first year premium and 7.5 percent on the second year premium.
 
The IRDAI found out this practice during its onsite inspection of SBI Life's books.

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Nepal bans big aircraft from landing
Nepal has imposed restrictions on heavy aircraft transporting humanitarian aid to Nepal to prevent further damage to the five-decade-old runway at the Tribhuvan International Airport here.
 
The decision means that planes weighing more than 196 tonnes will not be permitted to land.
 
A senior government official told IANS that some Western countries have sought permission to land big jets carrying relief materials following the April 25 killer earthquake.
 
However, the restrictions do not apply to scheduled international flights, whatever the type of the aircraft.
 
Airport sources said the US had planned to bring in relief materials on a Boeing 747. 
 
Airport officials said the decision was taken after three cracks appeared on the runway. 
 
More than 300 rescue flights, including 150 chartered ones, have landed here since a powerful earthquake rattled Nepal on April 25 leaving thousands dead.
 
"As the runway problem has started to reappear, we cannot afford to permit landing of heavy jets," said a senior official. "Unless we act now, our only international airport could be at risk of closure."
 
This is the second time in two years that the airport has imposed such restriction due to cracks on the runway. 
 
In August 2013, the airport authority asked all international carriers to find alternatives to wide-body aircraft flying into the airport. 
 
The cracks first appeared on the runway in June 2011 and have become a recurring problem.
 

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Here's a low-cost water purifier for villages
The unique low-cost solar water purifier (SWP) does not require electricity and can be produced by village craftsmen, claim its developers at the Nimbkar Agricultural Research Institute (NARI), an NGO working at Phaltan in rural Maharashtra
 
A discarded sari, a few glass pipes and freely available sunlight are the only requirements for an innovative system that can provide safe drinking water to a rural household.
 
The unique low-cost solar water purifier (SWP) does not require electricity and can be produced by village craftsmen, claim its developers at the Nimbkar Agricultural Research Institute (NARI), an NGO working at Phaltan in rural Maharashtra.
 
Also, unlike commercially available water purifiers, the SWP does not suffer from problems like filter clogging or wastage of water, NARI director Anil Rajvanshi told IANS.
 
Boiling the water is a recommended method to kill any disease-causing bacteria that may be present. But to boil the water, one requires electricity or other fuel.
 
NARI's purification strategy exploits the fact that one need not have to really boil the water to make it germ-free. Low temperatures are sufficient for sterilising the water provided the temperatures are maintained sufficiently longer.
 
"Our earlier studies have shown that water heated to only 50 degrees Celsius and maintained at that temperature for one hour, or heated to 45 degrees and maintained for three hours, becomes completely free of coliform bacteria," Rajvanshi said. 
 
The presence of coliform is an indication that pathogens (disease causing germs) are present. The bacterial colony count was done in the institute's microbiology lab according to international protocols, he said.
 
Thus a simple strategy for sterilization, he said, is to filter the water (drawn from a well or a stream) to remove particulate matter, then raise the temperature to about 45 degrees and maintain that for at least three hours, he said.
 
This was accomplished by NARI in a cost-effective way in two steps.
 
For the filter, Rajvanshi's team used a piece of cotton cloth (typically from a sari) folded four times. According to NARI's earlier research published in the journal "Current Science," the four-layered cotton cloth acts as an excellent water filter. For the next step, to sterilize the filtered water to make it germ-free, the team turned to solar energy.
 
In essence, NARI's purifier system consists of four slanting tubular solar water heaters attached to a manifold with a receptacle at the top to receive the sari-filtered water. The water entering the tubes, each with a three-litre capacity, get heated by sunlight. "The tubes, made of toughened glass are basically long thermos flasks," Rajvanshi explained. "Once the water gets hot, the tubes maintain the temperature long enough to sterilize it."
 
"Tests done by NARI on this water purifier for the last one year have shown that even on a completely cloudy and rainy day, water is heated to high-enough temperatures to make it potable," Rajvanshi said.
 
Thus a simple solar water purifier for a rural household can deliver 15 litres of drinking water daily, he said.
 
The cotton cloth is the only consumable in the whole system, said Rajvanshi. "We have tried to use the cloth from the cheapest cotton sari available locally. It is washed every day after filtration and is holding good for the last one year. After a couple of years the sari will wear out and so it has to be replaced."
 
According to Rajvanshi, the system costs Rs. 1,500. "NARI has not patented this technology since it feels that it should be made available freely for the rural population," he said, adding: "Any small rural workshop can fabricate it."
 
For the last one year, two such systems at NARI are producing around 30 litres of potable water for all its staff members, Rajvanshi said.
 
NARI is now exploring the possibility of scaling up this technology for village level application so that 30,000-40,000 litres of potable water can be delivered." 

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COMMENTS

Janakiraman Rajalakshmi

2 years ago

This is good news.

While cooking also Ramana Bhagavan always advocated simmering on low flame & covering the food tight with a lid.

We are listening!

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