New Delhi: The Insurance Regulatory & Development Authority (IRDA) has imposed a penalty of Rs5 lakh each on two life insurers — state-run Life Insurance Corporation (LIC) and HDFC Life Insurance — for failing to meet rural and social sector obligation in 2008-09, reports PTI.
IRDA has imposed a fine on LIC and HDFC Standard Life Insurance for non-compliance under the rural sector target during 2008-09, finance minister Pranab Mukherjee told the Lok Sabha.
Against the target of 25%, LIC missed it by a whisker and could only underwrite 24.27% of policies in the rural sector, he said.
At the same time, HDFC Standard Life achieved just 12.85% against the target of 19%, he said.
"As per the Insurance Regulatory and Development Authority (Obligation of Insurers to Rural or Social Sectors) Regulations, 2002 as amended in 2007, insurance companies are required to achieve the prescribed percentage of their policies in case of life insurers and of premium income in case of non-life insurers in the rural sector in the respective year of their operations in India," he said.
To another question, minister of state for finance Namo Narain Meena said the public sector general insurance companies have been incurring health insurance claims in excess of premium received and after factoring in acquisition costs, which are around 10%, and the management expenses which are over 25%, the combined ratio that is the total expenses for health portfolio exceed 140% of the premium income.
In an effort to rationalise the health insurance portfolio and provide health care at an affordable cost and at the same time help the insurer control increasing cost of health care, the public sector general insurance companies have initiated the process to create a Preferred Provider Network (PPN) of hospitals in fours cities, he said.
Theses cities include Delhi, Mumbai, Chennai and Bangalore. At present the PPN includes a network of 449 hospitals (Delhi-163, Mumbai-121, Chennai-84 and Bangalore 81) and more hospitals are joining the network, he added.
Replying to another question, Mr Meena said the airline industry has been pointing out to the government the constraints that are being faced by them.
The Indian Banks' Association (IBA) has taken up the matter with the Reserve Bank of India (RBI), he said.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
