Life insurers may get nod to raise non-AAA exposure

The Insurance Regulatory and Development Authority (Irda) plans to allow life insurers to buy a greater amount of non-AAA corporate debt, which could lead to higher returns for insurance policyholders.

A member of an Irda-instituted committee, looking into the investment guidelines of insurers, said it had decided to include government bonds as part of the AAA-rated investment requirement, enabling insurance firms to take additional exposure to non-AAA-rated securities, including A+ and A papers, by taking board approval.

The panel's move is a part of an exercise to amend the Insurance Act.

The move by the regulator could generate more returns for policy holders as lower the rating on a paper, the higher will be the yield that an investor earns.

It will also widen the investment horizon for insurers and make more funds available to companies that don't have the highest rating, but are credit-worthy.

"We want more money to flow into corporate bond market. The draft guidelines are sent to companies, consultants and other stakeholders for their feedback. It will become a law after the (Insurance) Act is amended," said a senior Irda official.

Insurance companies are now allowed to invest up to 50% in government securities, 15% in infrastructure bonds and 35% in other investment grade corporate bonds and equities. A minimum of 75% of debt instruments must carry triple A rating.

If investments in government bonds become part of the AAA calculations, the maximum permissible investment in non-AAA papers will rise to 25 per 100, assuming that the entire investment is in debt instrument, up from the current 17.50.

"It will give some additional exposure to debt papers," said the chief investment officer of a large life insurance company.

The rating assigned to a bond by credit rating agencies indicates its issuer's degree of creditworthiness and ability to meet financial commitments.

Bonds rated AAA, which is the highest possible rating, are perceived to have little risk of default and offer investors the lowest yields among bonds of comparable maturity.

Life insurance companies had 9,53, 052 crore investment in fixed income instruments as on March-end.

Irda shortlists two for key post

Two actuaries, A Apparao and Hemamalini Radhakrishnan, have been short-listed by the search committee appointed by the Insurance Regulatory and Development Authority (Irda), to fill its vacancy of a member (actuary).

Faced with a shortage of experienced actuaries, Irda might also scrap the position of executive director, actuary. This position has been vacant after K Subrahmanyam retired in June and Irda is yet to advertise for the position. The position of member (actuary) has been vacant since S Kannan retired in May. Irda had to advertise for the position twice, after the first advertisement failed to attract applications, due to stringent qualification norms. In the second advertisement, the regulator relaxed the qualifications and age limits for applying.

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“We received seven applications and after going through it, we have shortlisted two -- A Apparao and Hemamalini Radhakrishnan. The final decision will be taken by a panel comprising the finance secretary and Irda chairman,” said a member of the search committee, who did not wised to be named.’

Apparao had worked with Life Insurance Corporation of India (LIC) and his earlier assignment was as company actuary at Madison Life Insurance Company in Zambia. Radhakrishnan had a stint with LIC and worked at ING Vysya Life Insurance Company as actuary.

Member (actuary), equivalent to an additional secretary’s rank, is a key position in Irda. “Under the earlier norms, only actuaries with a fellowship could apply. In the second advertisement, actuaries who qualified as associates were also made eligible,” said an actuary in a private life insurance company.

Actuaries are primarily entrusted with the pricing of products, assumptions on future profits and valuation of businesses. Key positions in Irda, considering the main responsibility is understanding and approval of products. Insurers have been complaining about the delays in product approval over the past four months, since the positions became vacant. “It’s been more than four months since we have filed three new products. We are yet to get any approvals,” said a senior official at a private life insurance company, who did not wished to be named.

Banks in talks with Reliance Life for picking up stake

After securing the largest-sized foreign direct investment in the Indian insurance sector, with Nippon Life taking 26 per cent stake in it, Reliance Life Insurance, part of reliance Capital, the financial service arm of the Anil Dhirubhai Ambani Group, is open to dilute a “small” stake to banks.

“Some banks have expressed interest for taking some equity in our company. We are open to it,” Sam Ghosh CEO Reliance Capital told Business Standard. He said both parties are in agreement for such small stake sales with banks. And, the bank, in turn, would also work as a bancassurance partner of the insurance company.

He clarified that in the event of a stake sale, it will be the promoters', that is Reliance Capital’s shareholding that will come down. “Whatever might be the extent of the dilution, say three to five per cent, it will be done by the promoters. Nippon Life’s holding will remain at 26 per cent,” Ghosh added.

In May, the bancassurance committee report recommended that banks be allowed to tie up with sets of two insurance companies, life and non-life, for selling insurance policies. Following this, Punjab National Bank said it was taking a 30 per cent stake in MetLife India. Syndicate Bank is also looking to pick up equity stakes in existing insurance companies and invited bids.

Earlier in the day, the Union finance ministry said domestic insurance company holders could bring down their stake to 26 per cent over 10 years, which effectively paves the way for the Reliance Life-Nippon Life deal. Their deal was signed in March, for a 26 per cent stake to the latter for Rs 3,062 crore. However, clearance was getting delayed as the company was yet to complete 10 years of operation. According to the Insurance Act, a company has to complete 10 years before divesting any stake and Reliance Life will be completing 10 years only in January 2012.

“The circular (of today) clarifies the situation. Now we are waiting for approvals from the Insurance Regulatory and Development Authority and the Reserve Bank of India,” said Ghosh. He added that of the Rs 3,062 crore, about Rs 300 crore will be invested in the life insurance company and the remaining part in the parent company, Reliance Capital. “The life insurance business continues to remain robust and we expect to report higher profits in the current financial year,” he said.

Birla Sun Life to wipe out Rs 1,575 cr loss in 4 yrs

Private insurer Birla Sun Life Insurance (BSLI) that for the first time reported profit in 2010-11 is expecting to wipe off its accumulated losses in the next three to four years. BSLI has accumulated losses of Rs 1,575 crore.

Speaking to Financial Chronicle, Mayank Bathwal, chief financial officer at BSLI, said, “We have been reporting profits since the last five quarters including the first quarter of this fiscal. We expect it will take another 3-4 years to wipe out the accumulated losses depending on the rate of growth.”

The insurer reported a gross profit of Rs 144 crore for April-June 2011 as against Rs 9 crore in the corresponding quarter a year ago. “This was primarily driven by the growing size of in-force book, balanced product mix, lower new business strain and better expense management,” the company said in a release.

The Embedded Value of BSLI, which reflects the value of future profits embedded in the in-force policies written by a life insurance company, increased from Rs 3,816 crore as at March 31, 2010 to Rs 4,108 crore on March 31, 2011. Net profit for last financial year was Rs 305 crore against a loss of Rs 435 crore in FY10.

The company is targeting to grow over 18 per cent in this fiscal. “Industry should in a steady state on an average grow at approximately 15-18 per cent. Our goal is to grow faster that the market. In the last three months, our market share among private players has improved from 7 per cent to 8.4 per cent,” said Bathwal.

Since September 2010, when new Ulip guidelines capping the overall charges that could be levied on policyholders were made effective, insurers saw their growth and profitability being impacted.

“Insurers went through a significant transition to create a balanced product portfolio and revamped the business strategy in order to implement new guidelines. Given the fact that in essence the opportunity for life insurance remains very large, and we believe we will see positive momentum in new business sales from Q3 onwards largely aided by base effect,” said Bathwal.

Among private players, BSLI is fifth in terms of new business premium with an improved market share of 8.8 per cent in April-June 2011 up from 8.1 per cent in the first quarter of the previous year.

Assets under management of the insurer scaled up year on year by 19 per cent to 19,984 crore in the first quarter of this year.

PNB buys 30% stake in MetLife India

Public sector Punjab National Bank (PNB) has decided to acquire 30 per cent stake in MetLife India, an affiliate of MetLife Inc, and become a joint venture partner in the life insurance company. Following the closing of the transaction, the joint venture will rebrand as PNB MetLife o leverage the strengths of the two brands in the Indian market.

PNB started the process in December last year when it invited expression of interest from insurance companies across the world.

The bank received responses from 26 Indian and international companies proposing different models.

After evaluation of the various models, the bank opted to participate in a brownfield venture by acquiring stake in an existing Indian life insurance company. Accordingly, RFP was issued to 10 Indian insurance companies which had proposed this model. The bank shortlisted three life insurance companies after evaluating the technical bids: Bharti AXA, Aviva and MetLife, and based on the financial bids accepted MetLife India’s offer. PNB did not reveal the financial details of the deal. The transaction is subject to approvals from the Irda, the Reserve Bank of India and other regulatory bodies.

Bharti AXA Life Insurance launches Monthly Income Plan

Private insurer Bharti AXA Life Insurance today launched a traditional participating money-back plan - 'Bharti AXA Life Monthly Income Plan'.

"Bharti AXA Life Monthly Income Plan is the first regular monthly income product in our portfolio. This is in line with our brand positioning of 'Jeevan Suraksha ka Naya Nazariya' that has customer centricity and trust at its core," company Chief Marketing and Operations Officer Mark Meehan said in a statement issued here.

From a financial perspective, he said, a supplementary income can help bridge the gap in meeting the intended goals.

Bharti AXA Life Monthly Income Plan guarantees the policyholder additional monthly income.

The plan also provides the policyholder with life cover, financially protecting the nominee, in case of the unfortunate death of the policyholder.

The private life Insurance company is a joint venture between Bharti Enterprises and AXA, leading financial protection and wealth manager.

LIC set to employ brand consultant

The country's largest financial institution, Life Insurance Corporation of India, has decided to appoint a brand consultant to ensure that it appears as a tech-savvy institution to the public.

LIC has invited expressions of interest from consultancy firms to 'create further value for the strong LIC Brand'. Among other things, the corporation is seeking advice on brand strategy and support on brand tracking and media audit.

Speaking to ToI, a senior LIC official said that although LIC has one of the largest in-house technology teams with over 140 programmers, it does not have the image of a tech-savvy company. The brand consultant would change that.

"When it comes to number of customers, we are the largest life insurance company in the world and we make extensive use of technology to manage such a huge customer database," he said. With assets under management of over Rs 11, 00,000 crore, LIC is the largest financial institution in the country.

"Our ULIP portfolio is also larger than the portfolios of most mutual funds in the country. Yet not many are aware of this" he added. The corporation spends close to Rs 250 cr a year in advertising but this amount is much lower than its market share of revenue. "We are close to 75% of total premium, but in terms of adspend we are probably 25%" said an official.

Third-party agents | Irda tightens norms

Move to contain industry growth, say insurers.
The Insurance Regulatory and Development Authority (Irda) on Wednesday announced firm guidelines on agents servicing third-party policies. It has linked the norms to their past presentation and the number of years of experience.
The regulator on Wednesday said the total amount collected by agents for a given financial year should not exceed 3 times the renewal commission earned in the previous financial year. Also, agents for third-party services should have been in survival for at least two years.
A senior Irda official said there had been complaints of agents procuring business on behalf of other agents. He referred to an incident where an agent in Kerala had disappeared with the money of policyholders.
Irda said, “The insurer should assign this action to agents and corporate agents by allocating only a specified list of the policies, where the services of the agents that procured the business are no longer available to the insurer,”
Insurers outsource cheque pick-up work and premium collection to individual agents and corporate agents. Irda has defined such collection and pick-up by agents who have not procured such business as outsourcing. It asked insurers to look at the credentials of individual agents and corporate agents while outsourcing these.
Insurance companies’ executives said the move would restrict the industry.
P Nandagopal, chief executive officer of India First Life Insurance, says Irda should not get into micro management. “Risk management systems should be put in place and the regulator should not look into micro management. This is restrictive.”
Another executive of a large insurance company said the move was absolutely restrictive and would only bring down the premium collection.
Life Insurance Corporation of India (LIC) would be the most affected.
“This decision has been taken after consulting all parties,” an Irda official added. He said an insurer should remain accountable to the receipts issued by authorized agents or intermediaries. “Where an insurer permits its agent to collect premiums on its behalf, it shall be noted that in such instances, the agent is acting on behalf of the insurer,” said Irda.
It has put up a list of core and non-core activities. Those such as underwriting, product design and all actuarial functions, bank reconciliation and market conduct issues are core. Call centre and outbound calling for registering complaints or answering enquiries, claim processing for overseas medical insurance contracts and tele-marketing is non-core.
Insurers are asked to terminate all existing outsourcing contracts entered into in breaking of these guidelines before June 31, 2011. Irda said it might relax the limit by three more months, on a case to case basis, in respect of the existing contracts.

Reasons for cancellation of an Insurance Policy

There has to be a very good reason for an Insurance company to cancel a policy. The top five reasons for having your policy cancelled are discussed below:
1. Failing to pay on time.
The first and most obvious reason for cancellation would be failing to pay or paying late. This applies to all types of insurance. Each state has rules governing when an insurance company may drop your policy. Grace periods will also vary depending on which line of insurance you purchase (health, auto, home, life) and which insurance company you choose. Some car insurance companies may seize the opportunity to drop you if you’re only a few days late – especially if you're habitually behind on payments. However, many insurers value your business and won't drop you if you're a few days late.
Advice - Pay your bills on time. This usually means your premium must be received by the due date. Dropping the payment in the mail on the due date may not be good enough. If you’re worried about being late on your payments, check with your insurance company about its grace period. If you've been cancelled by your car insurance company, it may require that you to pay the balance due for the full term before they reinstate your insurance.
2. Falsifying the truth.
If you knowingly tell lies to your insurance company, it has the right to cancel your policy. To an insurance company, it’s bad business to give you a lower rate for lying. For example, lying to your auto insurer about the number of miles you drive annually can be cause for cancellation. Some insurers may simply increase your car insurance rates for this particular lie, but they can also cancel your policy and refuse to pay your claim — assuming you provided inaccurate information intentionally.
Life insurance companies may also cancel your policy if you lie. For example, if you lie about your deep-sea diving hobby and then die during a dive, your life insurance company could deny your beneficiaries’ claim. Any lie caught within the two-year contestability period of a policy can provoke the insurer to scale down the death benefit or even rescind the policy, depending on state law.
Advice - When applying for any type of insurance ‘honesty is the best policy’.
3. Your driver’s license has been suspended or revoked during the policy period
If your auto insurance company finds out that your license has been suspended or revoked, it will cancel your policy. This rule also applies to other members of your household. For example, if you have a child listed on your policy who has had his or her license revoked/suspended, your insurance company may cancel your policy if you fail to disclose this information. Car insurance companies often check your DMV record (and that of other members of your household) at renewal time. They will also find out about a license suspension if the person in question is involved in a car accident.
Advice - If someone in your household experiences problems with their license, notify your insurer. Your policy will not be cancelled (unless you’re the culprit). Your insurer may simply exclude coverage for that person.
4. You ignoring telephone calls from your insurance company
Ignoring your insurance company is never a good idea. If your insurer makes an effort to contact you – especially during a claims-settlement process – you’re obligated to comply. For example, if you get into a car accident, your insurance company will surely want to interview you or may even require you to attend a deposition if a lawsuit is involved. Failing to comply could be grounds for policy cancellation. A standard car insurance policy states that the insurer has “no duty to provide coverage” unless the insured is in full compliance with a number of duties. These include promptly notifying your insurer where, when and how the accident happened. A standard policy states that “a person seeking coverage must cooperate with us in the investigation, settlement or defense of any claim or suit” and “promptly send us copies of any notices or legal papers received in connection with the accident or loss.” This can include exams by physicians and medical records.
5. You commit suicide
Generally, life insurance policies have a contestability clause that says, among other things, the policy will not pay out if you commit suicide within the first two years of the policy. However, if you commit suicide two years and one day after you purchase the policy, your beneficiaries will be paid!

How to find missing life insurance policies?

It happens…
It could even happen with you!
Suppose you cannot find an insurance policy which was paid by your parent over 20 years back.
This is a tough problem, yet one many beneficiaries have faced.
When you don't know the name of the life insurance company, a good first step is to look for evidence of premium payments by going through copies of canceled checks or credit card statements, which would show the name of the insurer. This may be difficult since your parent’s were making the payments.
Life insurance companies make efforts to contact policyholders after they stop sending premiums, but if no one ever steps forward, they can't pay out the death benefit. If the insurance company knows the person died but can't locate the beneficiaries, it turns the death benefit over to the state as unclaimed property. States maintain databases of beneficiaries who are heirs of lost policyholders. Check with your state to see how to look up whether you are listed. In addition, the National Association of Unclaimed Property Administrators offers a MissingMoney.com Web site that lets you search nationwide for missing money, including life insurance policies that have been deemed unclaimed and transferred to the state.
Know more about Life Insurance

Revival of lapsed policies made easy

Once in a while there comes a time when the payment of premiums becomes difficult thus causing the policy to lapse. Policy lapsation can be dangerous as you or your financial dependants/beneficiaries may not get any benefit, which was the reason for buying the insurance cover in the first place.

You just need to know the reasons behind the policy lapsation and process of revival if ever there is any requirement in future (whatever the reason may be).

Reasons for policy lapse:
-because of carelessness
-because one doesn’t see value in continuing with the policy,
-because of a financial crisis and can’t afford it any longer

Policy will lapse only if you fail to pay your premiums regularly. If something happens to you during this period, the insurance company will honor its commitment and pay you or your beneficiaries, depending upon the type of policy you hold. However, if you stop paying your premium, then the insurance company will no longer be obliged to continue providing an insurance cover on your life. In this situation, your policy is said to have lapsed. The insurer might not provide any monetary benefits (the sum assured under the policy) to you or your beneficiaries if something were to happen to you.

Before your policy lapses, you still have a limited time period during which you can make well on a delayed premium payment. If you are late on your premium payment, the insurer will send you a reminder and give you a grace period within which to pay your premium. This is usually 15 days when you pay your premium monthly and 30 days in all other cases. If you fail to pay the premium even after this grace period, your policy will lapse. The insurer will send you a letter informing you about the same.

Revival: Most traditional policies (like term, whole-life and endowment plans) can be revived, subject to certain criteria that your insurer might impose on you.

Revival can happen at any time, but the conditions for revival might depend upon how long the policy has been lapsed for. Under the insurance laws, if the policy has been in force for at least three years, the insured gets up to two years to revive the policy. Some insurers like LIC have special schemes under which policies can be revived for up to five years from being lapsed.


- If you revive the policy within six months from the date of lapsation, the process might be as simple as paying the overdue premium (and interest) to catch up on the delay on your part.
- If you revive the policy after six months from the date of lapsation, you might be required to pay the overdue premium, penalty fees, as well as interest payment that could be up to 12-18% of the premium payment, depending upon the type of policy and the date of purchase.

At the time of revival, the insurer might impose a lot of conditions or even decline your request for a policy revival if the company is not convinced about the honesty of your application on grounds of suspected fraud or the like. It can be very likely that the insurer will ask you to appear for a medical test before the policy can be revived to ascertain whether you have developed a new medical condition during policy lapse that might expose the insurance company to a high risk in insuring your life.

At the time of revival, usually, full benefits that you or your beneficiaries are eligible for will be reinstated. However, if after revival, the insured commits suicide within one year, the insurer can deny the claim. Similarly, if the insured passes away within two years of the revival, the insurer has the option of conducting an inquiry before they decide to pay the claims to the beneficiaries.

Only for the risk-disinclined

Despite Irda’s good moves, insurance policies should be bought for cover, and not for investment.
Those planning to buy unit-linked insurance plans (Ulips) might as well wait for some time. This is because products launched from September 1 will be quite different from the existing ones
This is a crucial phase where the regulator, the Insurance Regulatory and Development Authority (Irda), and insurers are exchanging notes to fine-tune the products. Since June 28, when the first round of guidelines came, more changes have been introduced. Last week, Irda issued another set of clarifications that would change things further.

GUIDELINES
• 4.5 per cent guaranteed return for Ulip pension plan on gross premium till March 2011
• After March 2011, returns will be 50 basis points above the average of reverse repo rate at each quarter-end in the 3-6
per cent range
• Difference between minimum and maximum distribution charges to not be more than 1.5 times
• From 5th year onwards, minimum difference to be given on completed year
• Life cover on top-up premium to be based at the age of payment and not at the entry age
Pension plans
Pension plans will certainly look better. But, only for the risk-averse who have more than Rs 70,000 to invest annually. With a guaranteed return of 4.5 per cent on Ulip pension plans on gross premiums, returns will be higher than the existing savings deposit rate of 3.5 per cent.
But this 4.5 per cent will only be paid till March 11, 2011. After that, the returns will be linked to the reverse repo rate. Policyholders will get 0.5 per cent more than the average reverse repo rate at the end of each quarter. The regulator has asked insurers to give in the range of three-six per cent on pension plans after March 2011.
Since policyholders cannot withdraw money in the interim, liquidity could be an issue. For liquidity seekers, it makes sense to look at fixed deposits. State Bank of India is offering 7.25 per cent on five to eight years and 7.5 per cent on eight to 10 years deposits.
Also, most people already have exposure to the higher paying employee provident fund (8.5 per cent annually) and the public provident fund (8 per cent annually). But returns from these two can get capped as one can invest only up to Rs 70,000 annually. For ones who wish to invest more than this, this option could be good.
Costs
The newly-inserted clause...“the maximum and the minimum charges shall not vary by more than 1.5 times” should come as a relief.
For instance, if one considers a policy that was charging a premium allocation charge (PAC) of 50-60 per cent in the first three years, earlier, the cost in the first year could have been 30 per cent in the first year, 20 in the second and 10 in the third.
Now, because of the formula, the charge will be over five years. So, one could see numbers like these: If an insurer is charging, say, eight per cent in the fifth year, he cannot charge more than 12 per cent in the first year. Accordingly, PAC will be between a 44 and 56 per cent, spread over five years.
Besides the formula and spread over five years, the difference between the net and gross premium has to be maintained – four per cent in the fifth year (for a 10-year policy), 3.75 per cent in the sixth year, and so on.
“The regulator has also clarified that the minimum returns prescribed starting from the 5th policy year will be given on completed years,” said an actuary of a life insurance company.
Where the policyholder could possibly lose out is top-up premiums. In new guidelines, Irda said top-up premiums would be used to purchase an additional cover and not invested entirely. But latest clarifications specify that policyholders will not be allowed to pay top-up premiums in the first five years. After that, top-up premiums will be used to purchase cover, but according to the existing age.
As a result, the mortality rate will come into play. If a person purchases a policy at the age of 30 and starts top-ups at 35, he will have to pay higher mortality fees.
“The new notifications remove all ambiguity. Manufacturers cannot interpret the guidelines in their own ways. Of course, if the policyholder has a very long-term perspective, he should look at insurance.
Otherwise, if you have a horizon less than five years, mutual funds, bank deposits and the likes suit you,” said P Nandagopal, managing director & CEO, IndiFirst Life.

HDFC Standard Life evaluation at Rs - 3,380 cr

In a primary of its kind, HDFC Standard Life Insurance has put a worth of Rs 3,380 crore on itself as on March 31, 2010. The company has followed marketplace reliable implanted value (MCEV) technique to calculate the valuation.
The embedded value (EV) of a life insurance company is the current value of upcoming profits plus adjusted net asset value. It is constructed from the field of actuarial science which allows insurance companies to be valued.
The valuation comprises Rs 670 crore on account of shareholders’ accustomed net worth and Rs 2,710 crore for the business in strength. Meanwhile, the company is expected to impart Rs 350 crore throughout the current financial, as against Rs 172 crore in last financial. “The idea behind doubling-up our capital infusion is basically two-fold,” said the company’s CFO Vibha Padalkar said.
The bigger capital mixture for the business growth throughout the current financial is on account of the new scheme which is being unveiled following the the sweeping regulatory changes for unit linked insurance plans (Ulips) by Insurance Regulatory & Development Authority (Irda), Padalkar added.
The company is also looking for primary public offering (IPO) in 2012. Assets under management of the company double to Rs 20,770 crore in 2009-10 as against Rs 10,600 crore in 2008-09.

PNB to choose up partners' 58% stake in life venture

Punjab National Bank will buy out the 58% stake held by two of its partners in a planned life insurance joint venture, which is still pending regulatory approval. PNB holds a 30% stake in the planned life insurance venture, called Principal PNB Life Insurance Company, in partnership with Mauritius-based Principal Financial Group (26% stake), domestic firm UK Paints (32%) and Vijaya Bank (12%).

The company never got narrow approval from IRDA due to differences between the partners. PNB will buy the entire 26% stake held by Mauritius-based Principal Financial Group in the life insurance company, as well as domestic firm UK Paints’ 32% participating interest, the bank learned the Bombay Stock Exchange. However, the other home partner Vijaya Bank would remain with the joint venture. Following the change in partnership, the name of the planned joint venture would also be changed, sources said. Post regulatory approval, the stake of PNB in the venture would go up to about 88% per cent.

The stake sale was formalised under a communication of Understanding inked between the JV partners for reform their existing joint ventures.

PNB and Vijaya Bank will settle on the future course of action in the insurance company after receiving regulatory approvals and finalisation of the deals, it said. At the same time, the Delhi-based public sector lender will also buy out Principal and Berger Paints stake of 26% per cent and 25% per cent respectively in a proposed insurance broking company, which also did not get off the position.

However, in the asset management joint venture with Principal, both PNB and Vijaya Bank will remain as partners for a period of 3 years. As part of the joint venture restructuring, it was also decided that PNB and Vijaya Bank will sell their 30% per cent and 5% per cent stake respectively in a projected joint venture distribution firm to Principal.

Reliance Life launches Traditional Investment Insurance Plan

Reliance Life Insurance, an ADAG group company, has launched a savings cum protection plan. It’s a traditional investment plan that provides life protection and regular savings with yearly guaranteed investment income. The new scheme is a regular premium plan offer guaranteed investment returns. The guaranteed return module would be confirmed at the beginning of every financial year during the product term, the Life insurance company said in a statement.

The growth rate for the 2010-11 financial years is 7.75% per cent. At any point of time, the minimum guaranteed growth rate will not be less than the savings bank deposit interest rate as confirmed by the Reserve Bank, the company added. The insurance plan is available to children aged less than 30 days and senior citizens aged up to 70 years, with monthly, quarterly, half-yearly and yearly payment option. The fixed sum assured under the plan is 7.5 times of the annualized premium. The minimum term of the policy is 10 years and the maximum is 30 years. Besides the maturity and tax benefits, it offers health-connected cover which will pay a lump sum to the customer for as many as 33 specific surgeries, including open heart, kidney transplant, and 25 critical conditions. These riders can be added by paying an additional premium.

Bajaj Allianz Life net up at Rs 427 crore

Bajaj Allianz Life Insurance nowadays reported a profit of Rs 427 crore in FY 10 as compared to Rs 41 crore in the previous year.

However, in the non-life division the company posted a lesser profit of Rs 121 crore during FY 10 as against Rs 150 crore in FY 09.

"As far as profits, cost control, product-mix, fund performance, bottomline and renewals are concerned; FY 10 was a good year. However, for new business it could have been improved, especially in the first-half of the year," Allianz Country Manager and Allianz CEO and Bajaj Allianz Life Insurance CEO, Kamesh Goyal, told PTI here.

He said The insurance company sold 22 lakh new policies in FY 10 in the life segment and is eyeing a 30(%) per cent increase in traditional policies from the 18-20(%) per cent of the previous fiscal "as the instability in the equity market is not liked by several investors,".

Goyal said. "After the sudden dip in the stock markets in 2008-09, some people prefer the constancy of the traditional market,"

The share of ULIPs is likely to be around 70(%) per cent this fiscal as compared to over 80(%) per cent in the previous year, he said, adding this modify, however, has nothing to do with the row between the regulators-Sebi and IRDA-over jurisdiction over them.

He said. There has been no capital infusion into its life insurance company in the last two-years and there would be no need for it this year as well.

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Thumbs up: Happy days are now over again

A strong rebound in the domestic economy has ensured that the third seasons of the Indian Premier League (IPL) will nearly dual the sponsorship revenues of each of the eight team-owners compared to last year.
Team sponsorships, which on an average fetched Rs 24 crore for each team owner last year, is set to garner average revenue of Rs 40 crore this year.
Sources, who did not wish to be recognized, said that the Mumbai Indians are set to fetch the highest revenue of Rs 48 crore this year.
IPL organizers and team owners have carved out new slices of revenue, monetizing every prospective source from Internet, movie theatres, mobile phones and even the "strategic time out" sessions.
From merchandise sales to team jerseys and kits, insurance, chewing gum deals and radio and flying partners, team owners have managed to extract revenue from every possible source.
For instance, private life insurance company HDFC Standard Life has announced its second year of association with the Rajasthan Royals. Under the terms of agreement, HDFC Standard Life is the associate sponsor in the third season of the IPL.
It also plans several actions in the coming months with the Royals and some of them include financial planning sessions for young players in the team.
The association also leads to lots of other on-ground initiatives.
The other team owners have worked out parallel sponsorship deals.
The revenue earned from each of these deals will be channelised into the central revenue pool, a proportion of which is given away to the team owners in what is basically a pre-determined formula.
For instance, industry sources said tyre major MRF is dishing out Rs 16 crore for the blimp at match venues while Maxx has inked a Rs 20 crore per annum deal as the strategic time out partner.