Insurance agent killed wives for claim?

While in most cases insurance is used to guarantee a medical or financial emergency, in a twist of fate life insurance has become a cause of murder. At least that’s what seems to be the case in Gokak.

An LIC agent has been discredited and imprisoned for allegedly having taken the lives of his two wives within a gap of two years, in order to get the benefit of their life insurance.

The story unfurled a few days ago when Shankarlingappa Basalingappa Maji, a 30-year-old LIC agent, reported the death of his second wife, arousing the curiosity of the people of Kalloli in Gokak taluka in Belgaum district.

Maji, a native of Bijapur district moved to Kalloli a decade ago and villagers claim that he killed his first wife with similar motives, two years ago.

They alleged Shankar killed his wife two years ago and got a huge amount from the LIC policy he had in her name.

They said he also killed his second wife, Jayshri, on March 15 for the same purpose.
Maji’s neighbours said they were told that Jayshri was killed in a blast from a water-heater stove. Jayshri’s dying statement too says the same, but they believe that she must have said so only to protect her two little sons.

Surprisingly, the villagers reminded that Maji’s father and father-in-law (father of his first wife) too had died abruptly nine years ago, and they now suspect that to be Maji’s doing too. The villagers point at how Maji became a crorepati in the village in a matter of months then.

The villagers staged a massive protest in Gokak on Wednesday during which they alleged that Maji had been smart enough to prove all the deaths to be accidental.”This time we are not letting him get away,” said one of the villagers.

Irked by his criminal acts, the whole of Kalloli village was shut down on Wednesday.
Villagers, including women and children, demanded a death sentence for Maji. The situation got progressively more violent and the police had to resort to lathi charge and firing in the air.

A house and some public property was also damaged in the protest.

The women of the village have warned the police that they will burn Maji if he is released from custody of the police or even tries escaping punishment.

Gokak police, who have already arrested Maji on Tuesday night, arrested 40 more persons for causing damage to public property on Wednesday.

Budget 2013: Insurance penetration in smaller cities

Insurers may be a little disappointed as the budget didn’t seek to make insurance more attractive by increasing the section 80C deduction limit of Rs.1 lakh, but what may cheer them up is that the finance minister has taken measures to increase the penetration of the sector from the supply side.

Higher penetration

In his budget speech, the finance minister, has allowed insurance companies to open up branch offices in tier II cities and below without prior approval from the Insurance Regulatory and Development Authority or Irda. “Insurers need prior approval of the regulator at the time of opening any office but that’s never been a major issue,” says G. Murlidhar, managing director, Kotak Mahindra Old Mutual Life Insurance Ltd. To this effect, the government will also set up at least one branch office of state-owned Life Insurance Corp. of India (LIC) and one state-owned non-life company—United India Insurance Co. Ltd, National Insurance Co Ltd, The Oriental Insurance Co Ltd or The New India Assurance Co Ltd—in all towns of India with a population of 10,000 or more by the end of FY14.

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How to Choose a Health Insurance Policy

Medical emergencies can strike anytime therefore insurance coverage is a must for everyone. When medical bills hit the roof, the best thing to have is a health insurance policy that offers you peace of mind. If you are looking to buy a health insurance policy, here are all the answers to your questions.

What is the minimum premium to be paid as per the plan?
You will need to pay premium according to your insurance plan and variant. But, you will need to find out the amount the insurance company will cover in case of medical treatment. If your treatment exceeds this amount, you will have to pay the difference.

What are the exemptions?
Some health insurance companies will not pay for regular checkups. Find out if the insurance company is ready to cover all costs. Do read up the policy documents and go through their FAQs for a better understanding.

What happens if I don’t make any claims in the particular policy year?
If you have an insurance agent, ask him/her about what happens if you have a claim-free year. Also read the documents or any kind of information that you may find important. Some insurers offer increase in the benefits amount / decrease in the regular premium in case of a claim free year.

Does it cover international travel?
If your job sends you out of the country every month, it is necessary to take travel insurance into consideration. Most insurance policies do not cover international travel. Those that do are available at a higher premium. If you travel a lot, you should opt for one that will cover international health problems.

What is the payment going to be like?
You need to find out whether you will have to pay the hospital first and be reimbursed later or whether the company offers a cashless hospitalisation. If the company says it will reimburse you, it shouldn’t be a problem unless you can’t get all the money in place on time.

Health insurance frauds: Experts warn of sharp rise in mediclaim scams

Nine out of ten health insurance frauds in country's insurance sector occur in the mediclaim policy segment and there is a need to adopt measures to reduce the trust deficit between insured and insurer to curb the scams, experts have said.

"In insurance industry, number of grievances received or number of frauds committed is an indicator of growth trend of particular segment. In entire insurance sector, 90 per cent of frauds and grievances come from health policies," said Niraj Kumar, General Manager, Oriental Insurance Company.

He was addressing a seminar on health insurance at Amity University yesterday.

Kumar said if one has to draw two curves for health insurance segment, one indicating growth and second learning curve, it can be observed that the growth curve is ahead of learning curve.

This, he added, implies that industry's main aim is only to sell and market health policies, but there are important takeaways in such shortcomings so that the level of mistrust between insured and insurer can be minimised.

Richard Kipp, Managing Director, consulting firm Milliman said, health insurance in India has increased tremendously over few years but India needs to be cautious in its growth vis-à-vis the US where growth has now become stagnant.

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Bank, insurance services paralysed

Public-sector banks and many government offices were shut on Thursday on the second day of a general strike called by 11 trade unions pressing their demands and to protest against the ‘government’s pro-market reforms’. The bank employees, under the banner of United Forum of Bank Unions
Indore, took out a rally and held demonstration in front of the divisional commissioner office. Later, they handed over a memorandum addressed to the Prime Minister to the deputy commissioner.

“On the second day also, no operations were conducted in 5,797 bank branches in Madhya Pradesh, including 385 branches in Indore of 26 public sector banks, 11 private sector banks and eight foreign banks and rural banks,” a release issued by the bank union stated. Certain private sector banks including ICICI Bank, HDFC Bank, Axis Bank and IndusInd Bank were functional and foreign banks such as HSBC and Citibank also remained open.

Banking operations were ‘badly hit’ in Indore due to the two- day nationwide called by Central trade unions. In Indore the clearing house operation is managed by the State Bank of India, where the strike was total along with the other nationalised banks, said Alok Khare, general secretary, MP Bank Officers’ Association.

Most of the shopkeepers in Sarafa, the gold market of Indore, who daily deposit cash in banks were saddled with cash that they were forced to keep in their safes.

Apart from banks, work came to a standstill in 42 post offices and 35 branches of Life Insurance and general insurance companies as the employees did not turn up for work.

While ATMs remained functional, people who wanted to withdraw large amount of cash were hit. Similarly, people who had to transfer funds also faced inconvenience as no transaction took place and the check clearing operations remained suspended for the second day in a row. However, internet banking reduced the impact of the strike to some extent.

Strike hits work in banking, insurance sector

BHOPAL: Banking and financial sector operations in the state were badly hit on Wednesday, first day of the two-day all India strike by trade unions of organized and unorganized sector to protest against economic policies of the United Progressive Alliance (UPA) government. While banking business worth several thousand crore rupees came to a standstill, working in public sector undertakings like BHEL, BSNL and insurance companies were badly affected.

The call for the strike has been given by 11 central trade unions including Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC), Bharatiya Mazdoor Sangh (BMS), Centre of Indian Trade Unions (CITU) and All India United Trade Union Centre.

Workers from the transport, mandi and mining sector were also on strike in parts of the state while others will join the general strike on Thursday.

In the state capital essential services like hospitals, public transport, petrol pumps, schools and colleges remained unaffected.

Joint front of trade unions (JFTU) described the strike as successful. "Employees in banking, insurance and others areas of organised sector struck work on day one. The strike was successful in unorganised sector also," said JFTU spokesman Pushan Bhattacharya.

Porters, transporters and traders will join the strike on Thursday.

United Forum of Bank Union coordinator VK Sharma said banking business worth Rs 67,000 crore was affected in Bhopal district on Thursday.

"There are 400 branches of nationalized banks in Bhopal district where 5,000 employees work. All participated in the strike," Sharma claimed. In MP, Rs 3.14 lakh crore banking business was affected. "In 5,800 branches of banks from Madhya Pradesh, about 40,000 employees took part in the strike," he claimed.

In Bhopal district, there are 400 ATMs of different nationalized banks. "The claims that banks had taken adequate measures and loaded additional cash in the ATMs to meet cash needs of customers turned out to be untrue as several ATMs went out of cash by afternoon and people were seen rushing from one counter to the other. Several complaints about cash withdrawal were received," he added. Customers would face more problems in withdrawing cash from ATMs on Thursday, he said.

Insurance, transport, banking sectors likely to be hit on trade unions strike

The country braced for a two-day nationwide strike called by 11 trade unions from tomorrow in support of their demands with banking, insurance and transport sector likely to be affected in some states.

As fresh appeals were made today to the trade unions to call of the strike, leading industry body Assocham warned that the economy would take a hit of between Rs 15,000 crore and Rs 20,000 crore due to disruption in economic activity.

The government renewed its appeal to the bank employees including from the RBI not to join the strike saying there is "really no reason" for them to go ahead with it.

Normal life is likely to be crippled in states like Kerala and Tripura where workers from various sectors including transport and banking are set to join the protest against the Centre's economic and labour policies.

States like West Bengal, Kerala, Maharashtra, Gujarat, Tamil Nadu, Delhi, Haryana, Karnataka and parts of Uttar Pradesh are likely to be affected significantly, Assocham president Rajkumar Dhoot said in a statement in Kolkata. Apart from unions owing allegiance to the Left, the pro-Congress INTUC and pro-BJP BMS are also participating in the strike.

The unions have put forward a charter of 10 demands such as urgent steps to control price rise, strict enforcement of labour laws in all places of work, social security net for workers in the unorganised sector, end to disinvestment in PSUs and raising minimum wage to Rs 10,000 a month. 

Federal health insurance exchanges face uphill battles

The marketplaces may run into adverse selection problems and struggle to comply with state laws, says a report — concerns echoed by some physician organizations.

Washington Federally operated health insurance exchanges may find it more challenging than other exchange models to attract healthy patients and maintain stable insurance markets, said the author of a new policy brief by Health Affairs and the Robert Wood Johnson Foundation.

The Affordable Care Act created the exchanges to provide individuals and small businesses with a means to shop for coverage options. Although some states have opted to develop their own marketplaces, about half are leaving it up to the federal government to run exchanges in their states. A handful have chosen a state-federal partnership approach, in which states would retain traditional insurance regulatory authority.

In so-called federally facilitated exchanges, the federal government will operate the marketplaces, not just facilitate them, wrote the brief’s author, Sarah Goodell, an independent health policy consultant. Depending on the arrangement they strike with the Dept. of Health and Human Services, states could end up performing some duties, such as administering the states’ reinsurance programs and making final eligibility determinations for Medicaid and the Children’s Health Insurance Program.

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More city nursing homes to provide cashless insurance

More nursing homes in Mumbai will soon provide cashless insurance treatments, as the Association of Medical Consultants (AMC) is set to create a cell to ease the paperwork required in such cases.

A cashless medical insurance implies that in case the insured person is hospitalised

in any of the network hospitals, the claim is settled by the health insurance company directly with the hospital.

The AMC has formed a body, the Network of AMC Hospitals (NoAH), to help private and public sector insurance companies come together so that patients can avail of cashless insurance treatment.

The NoAH has also partnered with an outsourced knowledge partner who will handle the authorisation process. 

Since 2010, nursing homes have not been offering cashless insurance treatment for its patients.

“The cell will deal exclusively with the problems associated with nursing homes. It will be a self-regulated group which will promote uniform billing standards and voluntary accreditation.

"170 of the 217 members attached with NoAH already have accreditation. We are in talks with the other insurance companies,” said Dr Sudhir Naik, chairperson, NoAH.

The lack of cashless insurance was driving nursing home patients to hospitals, said doctors.

“Many people are going straight to private hospitals because they have the option of cashless insurance. However, what they do not realise is that in the bargain, the claims are higher,” said Dr Sangeeta Pikale, convener, NoAH.

The nursing homes that have not been accreditated yet have promised to do so in a year.

The nursing homes under NoAH will have a common billing format, common insurance and cashless procedural format, and will display the tariff of services provided in the nursing homes.

“They will not have the problem of following up on paper work. This will benefit the nursing home, insurance company and the patient,” said Dr Naik.

Insurance sector looking for remunerative tax incentives

The Indian insurance sector is looking for remunerative tax incentives in Budget 2013-14 to boost sales volumes and increase penetration. While life insurers demand separate deduction limits for long-term insurance products, non-life insurers want special exemption categories for home and property insurance.

Amitabh Chaudhry, managing director and chief executive officer (CEO) of HDFC Life Insurance, said while the government was aiming to shift savings from real asset classes such as gold to financial asset classes, the Budget would provide an opportunity to introduce some long-standing demands of the life insurance industry.

According to T R Ramachandran, CEO and managing director of Aviva Life Insurance, separate sub-limit for long-term savings such as insurance is crucial to spur demand for life insurance products. “Currently, the deduction under Section 80C is a combined limit shared with other investment products, including provident fund contributions, savings certificates, bank tax saver deposits, and insurance and life insurance premiums. Hence, the government should look at encouraging people to save for long-term by providing a separate sub-limit of Rs 1 lakh for long-term savings,” he said.

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Motor insurance for dummies

A vehicle is a valuable possession for its owner. Motor insurance is mandatory by law so every car or bike owner must have a motor insurance. But not all are aware about its features, what is actually covered and what is not.

 A vehicle is a valuable possession for its owner. Motor insurance is mandatory by law so every car or bike owner must have a motor insurance. But not all are aware about its features, what is actually covered and what is not.

Your vehicle can be covered under either Third Party Insurance or Comprehensive Car Insurance.

Third Party Insurance only covers your liability towards a third party in case of death, injury or property damage caused to them by your vehicle. It doesnt do any good to your vehicle. If you love your car or bike you must have a Comprehensive Insurance policy which covers both third party liability and damage to your vehicle. But this is not much of a worry since most private players offer only Comprehensive Insurance policy. The insurance policy is valid for one year. It becomes effective from the moment the payment of premium is received by the insurance company and ends at midnight exactly a year later.

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Claimed insurance? Health, motor covers will sting you

Get ready to pay more for your health or motor insurance covers if you have made a claim in the past.

The Insurance Regulatory and Development Authority (Irda) has proposed a new set of rules, effective from March 2014, giving general insurers the leeway to charge differential prices for motor and health plans, based on individual claims experiences. So, if you have made a claim, you end up paying more.

“Pricing is a function of product feature and the risk perceived by insurers after taking into various factors. Differential pricing will benefit customers as there will be a wide difference between policyholders who made claims and who didn’t,” said Sampath Kumar, chief financial officer, Bharti Axa General Insurance.

On the other hand, at least theoretically, you could be paying less if there is no claim against your name.

The Irda has also proposed that insurers to set aside more capital for policies where the risk is higher — mainly those offering guaranteed returns.

In an exposure draft put out on Thursday, it said it has decided to move from the current factor-based pricing regime to one based on solvency. Accordingly, life insurance policies offering guaranteed returns will require higher solvency margins, or more capital, to be set aside. This will push up premiums for traditional products, said a senior actuary.

However, unit-linked policies will be less expensive as insurers need to set aside less capital against them.

Good Health Insurance - How Do You Find One

Health Insurance in Simple Words:

Health insurance is a type of insurance that provides financial coverage for medical costs incurred from illnesses and injuries. The rise in illnesses and injuries in today fast-moving world have made health insurance a must-have for everyone. Health insurance also gives you peace of mind when in times of stress incurred from the hospitalization of a loved one.

Buying Health Insurance Today:

The insurance industry has witnessed a boom in the past decade with many young and dynamic companies offering smart, economic policies. This has made the customer choice a vital and careful one. Choosing the right kind of insurance means a lot as policies differ in terms of coverage and flexibility. In most cases, your health insurance will become inadequate in terms of financial coverage. Hence, it is a must to choose a good health insurance for your family.

Defining Good Health Insurance: 

A good health insurance policy is one that protects you from medical expenses you can’t afford on your own. It also covers a wide range of medical expenses including doctor fees, outpatient treatment, hospitalization expenses, prescription medicines, emergency ambulance services, and diagnostics. A good health insurance not only provides you with better access to health care, but also reduces your out-of-pocket expenses.

Choosing Good Health Insurance:

There has been a rise in health risks and health care costs, making it extremely important to choose a good health insurance that not only covers your basic health care needs, but also miscellaneous expenses such as eye care, dental treatments and maternity. However, the amount of health insurance policies available is vast making the task of choosing a good health insurance policy a tiring one.

Here are some things to look for while choosing a good health insurance policy:

-          Which insurance plan best suits the needs of you and your family?

-          What are the coverage options available?

-          Does the policy cover disabilities and other critical illnesses?

-          Does the policy provide extra health covers that could benefit you?

-          Are there any pre-existing clauses that you should know?

-          Most importantly, is the policy affordable?

What Should Your Policy Cover?

Apart from standard hospitalization expenses and medical bills, health insurance policies nowadays offer coverage for a lot of miscellaneous expenses too. Policies cover dental treatments and eye care as part of their plan while maternity expenses are covered with a waiting period that differs from one policy to another. Some policies also cover ayurvedic treatments. A good health insurance plan must also cover out-of-pocket expenses incurred before, during and after hospitalization.

A good health insurance policy is one that covers you for what you require and what you don’t. Remember, a good policy can help you stay covered from unexpected eventualities. Secure yours and your family health with an ideal health insurance policy that fits your needs and budget.

Repeat offender? car insurance may cost more

Are you a repeat offender of traffic rules? Soon, driving may turn out to be costlier for you. Or, you may be forced to even stop driving. The Delhi traffic police are planning to send details of the cars of habitual offenders to insurance companies so that they can be forced to pay more
on premiums.

The companies can even refuse to renew their insurance plans and the police regularly impound uninsured cars.

The police said the initiative would come into effect once the e-challan system — which would store digitally the details of vehicles of high-risk drivers — becomes operational by March.

“The data would either be uploaded on our website or be sent to the insurance companies,” said Anil Shukla, additional commissioner (traffic). He said the insurance companies would then have to decide on policy renewal and premium hike.

Claiming that “it will deter the rash driver on city roads”, Sudhir Yadav, special commissioner of police (traffic), said drivers would be more careful now that getting traffic citations repeatedly would mean an increase in premiums.

Third party motor insurance premium may rise further

Mumbai: Lakhs of vehicle owners across the country may have to pay more for buying the mandatory insurance cover — third party motor cover — for their vehicles.

The third party motor insurance premium is likely to go up within the range of 15-50 per cent in 2013, the second hike in the last one year.

“The hike may come within a fortnight . The premium may increase between 15-50 per cent in various vehicle categories,” said the chairman of a public sector insurance company.

As the third party motor insurance is still regulated by IRDA, it has already decided to hike the rates to make up the huge losses in this portfolio — a lion’s share of total losses of over Rs 10,000 crore suffered by the insurance sector is accounted by third party motor cover.

“Our claim ratio is 175 per cent in the third party motor segment,” said G Srinivasan, CMD, New India Assurance.

In fact, the earlier hike which was done in March 2012 was disputed by the transporters’ association which had fought a legal battle with IRDA and general insurers in Calcutta High Court. However after eight months of litigation, the court had passed verdict in favour of the hike.

Earlier in 2012, while asking the domestic general insurers to hike the provisioning — capital to be set aside to pay the future claims as it takes years settle claims under this category — against the third party motor portfolio, the IRDA had assured

Car, truck insurance premiums set to go up

This could happen as insurance companies may hike premiums by as much as 40 per cent for commercial vehicles and 10 per cent for two-wheelers and personal cars to compensate for high claims in the motor insurance business.

The general insurance industry is currently in discussions with the regulator on the revision of premium rates for third party motor insurance which will be applicable from April.
Third party coverage

Motor insurance in India has two components — one covering third-party damage in terms of property or life and one covering one’s own damage.

The third-party coverage is mandatory by law for both commercial and personal vehicles.

The Insurance Regulatory and Development Authority had earlier come out with a formula based on inflation and claims experience of insurers to account for risk based pricing for revising premium rates.
‘transparent formula’

“It’s a very transparent formula by which the increase will be given but the problem is that the start itself is 40 per cent lower than what it should be. Though there has been an annual increase in premium rates it is still not adequate and it is trailing behind the claims. So the industry needs a correction of 40 per cent in third party motor premium,” said G. Srinivasan, CMD, New India Assurance.

For More Information please Visit :  http://www.thehindubusinessline.com/industry-and-economy/banking/car-truck-insurance-premiums-set-to-go-up/article4361599.ece

Consumer Federation of America alleges unfair insurance practices

A recent study from the Consumer Federation of America revealed some odd findings when it comes to auto insurance.

The CFA used two hypothetical drivers and sought to get them insurance from a variety of carriers. Both drivers were 30-year-old women who had the same amount of experience on the road, lived in similar ZIP codes, and sought the minimum amount of coverage.

As for the differences, one woman was single, rented her house, and hadn't had insurance for 45 days. She also had a spotless record on the roads: no accidents and no tickets. The other woman was married, a high earner with a graduate degree, and a home owner. She had been at fault in an accident that caused $800 worth of damage within the past three years.

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No insurance cover for organ donors

CHENNAI: Srinidhi (name changed), a housewife, donated a part of her liver to her husband a few years ago. Even though she has no complications and is perfectly healthy, she was surprised to find that insurance companies rejected her application for comprehensive health cover.

"Insurance companies don't ask if you have donated an organ. The application forms ask if there is a scar of the body and the reason for it. When you say you donated an organ, the application is rejected," said Srinidhi. The liver regenerates after donation and the donor is as normal as anyone else. "I am willing to prove this with scans and doctor's reports," she said.

 Many donors say they weren't issued policies despite undergoing extra tests. The problem is not confined to new applications. Insurers insist that donors undergo specific tests when policies come up for renewal. "The profile of the patient may have changed post donation, and risks arising out of such changes may not be covered under the original policy," said a senior official from a Chennai-based insurance company.

Jayakar (name changed), 69, who leads a retired life in Bangalore, applied for health insurance six months ago. Three insurance companies, including a public-sector company, rejected his application after he told them he had donated one of his kidneys in 1984.

"I am healthy. I am not diabetic or hypertensive," he said. Jayakar worked for State Bank of India and then the Tata group, both of which covered all his medical expenses. "After retirement, I realized I didn't have health cover. I didn't know I'd be ineligible because of a selfless act," he said.

Kidney and liver are the only two organs people can donate when they are alive. Other organs such as heart, lung and pancreas come from brain-dead persons. Nephrologists say donating a kidney may lead to a slight increase in blood pressure and in protein levels in urine, but it does not increase risk of kidney disease or reduce life expectancy. "On the contrary, I would say kidney donors are healthier than others because before they donate, we ensure that they are free of all diseases," said nephrologist Rajan Ravichandran.

Urologist Dr Sunil Shroff, who heads Mohan Foundation, a non-profit that promotes organ donation, said there were no reasons to reject applications by organ donors. "We must encourage people to donate organs to their loved ones. I wish medical professionals working with insurance companies would stop rejecting genuine cases," he said.

A few do get lucky. New India Assurance has given policies to some organ donors. "A person donates an organ only when it is considered safe by doctors. While there may have been some aberrations in terms of health cover for organ donors, we don't have an issue in terms of providing cover for them," said G Srinivasan, chairman and managing director, New India Assurance. 

Chidambaram plans to introduce insurance, pension bills in Budget session

NEW DELHI: Finance Minister P Chidambaram plans to introduce the insurance and pension bills in the Budget session of Parliament as he is optimistic of securing the opposition's support on the contentious legislations, Bank of America Merrill Lynch said after an investor interaction it hosted with Chidambaram in Singapore.

The insurance bill will propose to raise the FDI cap in the sector to 49% from 26%, while the pension bill will open up the sector to foreign investment up to 49%.

"The FM hopes to pass the insurance bill and the pension bill in the Budget session. He mentioned that behind the noise, there were quiet negotiations with the opposition parties and support from them," Bank of America Merrill Lynch said in a note on Wednesday.

Chidambaram, who is on a four-nation tour to woo investors, had on Tuesday promised a stable budget that will take fiscal consolidation process forward and not include any unpleasant tax measures.

The cabinet had in October last year approved the Insurance Laws (Amendment) Bill 2008 with 49% foreign investment limit in the sector, but the government did not move it in the Parliament's winter session as it lacks the numbers to get the bill passed on its own.

Chidambaram, however, was not hopeful of getting the goods and services tax in place by April 2013, but he could get the legislation for introducing the bill passed by December this year.

The ambitious reform of the indirect tax regime that envisages one goods and services tax in place of many levies is stuck because of differences between states and the Centre over its structure and powers of the two.

The finance minister reiterated the government's commitment to reforms and liberalisation, but said an unstable government in 2014 could be the biggest threat to reforms, the note said. India will elect a new government sometime in May-June next year.

Bank of America Merrill Lynch said the minister also told the investors that 5.3% fiscal deficit target will be met through cost cuts and austerity measures. He also said that the five-year fiscal deficit reduction targets announced by him earlier would be met without raising taxes.

The plan envisages reduction in fiscal deficit to 3% of GDP by 2016-17.

Chidambaram pegged the current year's growth at 5.7%, rising to around 6.7% in 2013-14 and to 8% the next year.

"The FM reiterated that the Cabinet Committee on Investments would speed up project approvals. Moreover, the PSUs have been asked to spend on projects as per targets or return surplus cash by way of special dividends," the note said.

Chidambaram also hoped that the direct transfer of benefits will help reduce leakage in the subsidy scheme and save subsidies, citing 20 to 60% savings in pilots. 

IRDA comes out with framework for monitoring insurance frauds

 The regulator has asked insurance companies to lay down procedures to carry out the due diligence on the personnel and submit a compliance report before June

New Delhi: the Insurance Regulatory and Development Authority (IRDA) has come out with a framework for monitoring frauds in the insurance sector and asked insurers to carry out due diligence on their staff, including agents, reports PTI.

Stating that such fraud reduces consumer and shareholder confidence and can affect the reputation of individual insurers and the insurance sector as a whole, IRDA asked insurers to lay down procedures for monitoring and early detection of frauds.

“Lay down procedures to carry out the due diligence on the personnel (management/staff)/ insurance agent/ corporate agent/ intermediary/ TPAs before appointment with them,” IRDA said in a circular to all insurance companies.

The insurers have to submit a compliance report with the regulator by 30 June 2013.

 “It is required that insurers understand the nature of fraud and take steps to minimise the vulnerability of their operations to fraud,” IRDA said.

It asked insurance companies to ensure that the risk management function is organised in such a way that the insurer is able to monitor all the risk and take steps to address them.

IRDA classified frauds in the insurance sector under three heads—claim fraud or policyholder fraud, intermediary fraud and internal fraud.

It also asked the insurance companies to frame an anti-fraud policy and said that the company’s board would review the policy on an annual basis.

The insurer shall inform both potential and existing clients about its anti-fraud policies, IRDA said, adding that the insurer has to highlight the consequences of submitting a false statement for the benefit of policyholder in the insurance contract.