“Settlement of claims depends on the terms of policy contract rather than mode of sale. Therefore, claims under policies sold online would be settled in same way as policies sold on other modes so long as the terms of policy contract are the same,” minister of state for finance Namo Narain Meena said
New Delhi: Claims under insurance policies sold online would be settled in the same way as policies sold using conventional method, reports PTI.
In a written reply to the Rajya Sabha, minister of state for finance Namo Narain Meena said as per the information from the Insurance Regulatory and Development Authority (IRDA), some insurance companies resort to sale of insurance products through their websites or portals in addition to sale through the conventional distribution channels.
“Settlement of claims depends on the terms of policy contract rather than mode of sale. Therefore, claims under policies sold online would be settled in same way as policies sold on other modes so long as the terms of policy contract are the same,” Mr Meena said.
He also said that as yet there is no proposal from any insurer for sale of their entire policies on online mode.
“Insurance is sold through multiple modes such as face-to-face, tele-calling and online. So far as online is concerned, it affords a non-intrusive and easy purchase of insurance at a time convenient to the buyer from wherever he is located without the involvement of an intermediary,” he said.
Mr Meena said that as per census 2001 data, the IRDA has reported that the approximate number of insurable persons in the country is 57,03,35,944.
“The IRDA has informed that the details of insured persons, institutions, etc, company-wise are not maintained,” he said, adding that no detail of people belonging to Above the Poverty Line (APL) and Below the Poverty Line (BPL) category are maintained.
As on 31 March 2010, the total number of policies in force relating to private life insurers were 4,03,63,200 and the lives covered under group new business by private life insurers were 4,19,59,796.
According to the minister, insurance penetration has increased from 2.32% to 5.51% over 2000-2010 period.
“The number of insurance offices has increased from 2,199 in 2000 to 12,018 in 2010.
“From the single channel system of tied agents which was predominant before opening up of the sector in 2000, multiple channels of distribution comprising brokers, bancassurance, corporate agents emerged in the decade and accounted for nearly 21% of the new business in the year 2009-10,” Meena said.
He added that these channels have aided in expanding the market as well as in better outreach.
The first year life insurance premium grew from Rs19,857.28 crore in 2001-02 to Rs1,09,894.02 crore in 2009-10.
Meanwhile, the total life insurance premium rose from Rs50,094.46 crore in 2001-02 to Rs2,65,450.37 crore in 2009-10, the minister added.
In reply to another question in Rajya Sabha, the minister said that there have been some concerns in the recent past about high interest rates, coercive recovery processes and multiple lending practiced by some micro finance institutions.
“In order to study these and other related issues and implications for its policies and given the useful role played by the micro finance institutions in providing access to financial services to the poor and excluded, the Reserve Bank set up a sub-committee... study the issues and concerns in this sector, including ways and means of making interest rates charged by them reasonable,” he said.
The sub-committee, headed by RBI director YH Malegam has submitted a report in this regard.
Bank loans to MFIs has been given the status of priority sector. A margin cap of 12% for all MFIs and interest cap on individual loans at 26% per annum for all MFIs have been fixed, besides directing them not to charge any penalty for delayed payment.
The decision was taken as it was observed that branch expansion in Tier 2 centres has not taken place at the desired pace
Mumbai: The Reserve Bank of India (RBI) on Tuesday relaxed branch authorisation policy, allowing banks to open administrative office or service branch in cities with population of over 50,000 but less than 1 lakh without its approval, reports PTI.
“Now that general permission to banks has been extended for opening of branches in Tier 2 centres, domestic scheduled commercial banks (other than RRBs) will be allowed to open administrative offices and central processing centres (CPCs) or service branches in Tier 2 centre (with population 50,000 to 99,999 as per Census 2001),” the RBI said in a notification.
Thus, a bank can open such offices in the Tier II cities without permission from the central bank.
The decision was taken as it was observed that branch expansion in Tier 2 centres has not taken place at the desired pace, it said.
As per the existing regulation, such relaxation is already available to banks in case they want to expand their presence in Tier 3-6 cities.
The regulator had observed that certain employees and clients had sold Satyam shares between 25 November 2008 and 16 December 2008 till before the announcement. Besides, some 80 clients of the company sold shares before 7 January 2009, on the eve of Mr Raju’s confession about fudging of the accounts
Mumbai: The Securities and Exchange Board of India (SEBI) on Tuesday imposed a penalty of Rs5 lakh on G Jayaraman, compliance officer of the erstwhile Satyam Computer Services for his failure to adhere to market regulations, reports PTI.
“After taking into consideration all the facts and circumstances of the case... impose a penalty of Rs5 lakh on the noticee (G Jayaraman) in terms of Section 15 HB of the SEBI Act...” SEBI said in an order.
Section 15 HB states that “Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by the board... shall be liable to a penalty which may extend to one crore rupees”.
Mr Jayaraman has been directed to submit the penalty amount within 45 days.
SEBI had conducted an investigation pertaining to issues relating to insider trading in the scrip of Satyam in 2008-09.
It had said that the company’s announcement on 16 December 2008 to acquire Maytas Infra and Maytas Properties, and the subsequent withdrawal of the proposal a day later, besides the confessions made by Satyam chairman Ramalinga Raju in January 2009, were price sensitive information.
The regulator said it was observed that certain employees and clients had sold Satyam shares between 25 November 2008 and 16 December 2008 till before the announcement. Besides, some 80 clients of the company sold shares before 7 January 2009, on the eve of Mr Raju’s confession about fudging of the accounts.
The investigation had revealed that Mr Jayaraman had allegedly violated the provisions of the Model Code of Conduct for Prevention of Insider Trading for Listed Companies during the investigation period by not closing the trading window when there was unpublished price sensitive information about the acquisition of MIL and MPL by SCSL.
SEBI had initiated adjudication proceedings against Mr Jayaraman and a show-cause notice was issued to him in September this year.
Mr Jayaraman had replied to the show-cause notice and given his version of events including stating that since there was no direction from the board of directors of Satyam to close the trading window, such a step was not carried out.
After consideration of evidences, SEBI, in its order said: “Even though the clause specifies that the compliance officer is to execute his responsibilities under the overall supervision of the board, yet the provision confers key responsibilities on the compliance officer per se, which cannot be overlooked.”
According to SEBI, matters like consideration of accounts, declaration of dividend, bonus and acquisition of entities are information which become price sensitive from the proposal stage itself.
“As the proposal is not in public domain, it is imperative on the compliance officer to close the trading window so that insiders and connected persons do not take advantage of such information.
“... as compliance officer, he cannot raise the defence that internal approvals were not available. Such contention, if accepted, would render the concept of appointment of compliance officer meaningless and is therefore not acceptable,” the order said.
It said certain employees of erstwhile Satyam got to know about the announcement of acquisition of MIL and MPL in advance and indulged in insider trading.
“...the noticee has not fulfilled his duties and responsibilities as the compliance officer of SCSL,” SEBI said.
“This was very significant information which led to a fall of 33.5% of share price which is quite substantial. It has been established that the noticee failed to comply with the Code requirements under the Prohibition of Insider Trading (PIT) Regulations and some of the employees even traded in SCSL shares,” SEBI further added.
In January 2009, Satyam chairman Raju admitted to fudging the accounts of Satyam, which turned out to be one of the biggest corporate frauds to come to light in country. The company was later taken over by Tech Mahindra and renamed as Mahindra Satyam.