The Insurance Regulatory and Development Authority (Irda) has said the Securities and Exchange Board of India’s (Sebi) take in to insurance companies on unit-linked insurance plans (Ulips) sold by them was “misconceived on abstract, legal and structural grounds”.
Irda’s letter to the market regulator comes after the latter’s show cause notice to insurance companies last month, asking why they had not taken Sebi’s approval to sell Ulips.
In a letter to Sebi Chairman C B Bhave last week, Irda’s Deputy Director (Life) Sudipta Bhattachaya pointed out that the regulatory set up in India, which had legal backing, was clearly demarcated.
In its letter, the insurance regulator said the road map for regulation of Ulips by Irda was “well laid down, and settled,” and there was “no merit” in the conflict that insurers must obtain a certificate of registration from the Sebi for selling these products.
Following the Sebi show cause notice on January 15, life insurers had approached Irda. “While there is a factor of market exposure, the insurance component is much higher. The rules are reasonably clear and investor interest is clearly protected,” said the CEO of one of the largest Life Insurance Companies. For some private players, Ulips account for close to 90 per cent of new business.
Application of mutual fund rules to Ulips would mean that companies will not be able to pass on the commission to customers, since entry loads have been banned for mutual funds. In addition, the investment and accounting rules are different for Ulips and mutual funds.
Sources close to the development said Irda’s letter has pointed out the legal requirements that limited Sebi’s jurisdiction to securities and securities related transaction.” What constitutes a security has been defined in the Securities Contract (Regulations) Act, 1956 and insurance contracts are not regulated under these securities laws,” it said.
Further, Irda said that structurally, Ulips are distinct from mutual funds and pointed out that the minimum capital requirement for an insurance company was Rs 100 crore and also maintain around 3 per cent as solvency capital. In contrast, an asset management company “is required to manage thousands of crores of assets with just Rs 10 crore”.
“Certain similarities in the features of various products issued in the financial world would not necessarily imply regulatory overlap,” Irda added.
Asked to comment, a senior Sebi official said: “ULIPs are mix investment products with Insurance cover and since it involves management of funds, Sebi has a role in protecting the interests of investors... Ulips are fit for regulation under Sebi’s mutual fund regulations.”
Friday, February 19, 2010
Wednesday, February 17, 2010
Kotak Life Insurance launches Three new ULIPs
Kotak Mahindra Old Mutual Life Insurance Limited (Kotak Life Insurance) has launched three new ULIPs – Kotak Super Advantage, Kotak Guaranteed Pension Builder and Kotak Platinum Edge.
Kotak Super Advantage is a plan that addresses the financial needs of investors while building long-term savings for their future.
Kotak Super Advantage Plan invests 100% of premiums from second year gone and provides guaranteed returns of up to 280% per cent of the first year premium on maturity. Further attractive the return is addition of 3% per cent of average Fund Value of the last three policy years on maturity.
Kotak Guaranteed Pension Builder is a Retirement Plan that enables systematic savings for retirement. The plan offers Capital Guarantee, a feature that allows equity disclosure while minimizing the associated risk as the total premium paid by the investor is guaranteed at maturity.
Kotak Guaranteed Pension Builder plan offers safety of Pension Guarantee Fund, a fund that invests in equity or debt depending upon the market condition and delivers returns. Limited period payment option in this plan allows suitable payment periods of 3 and 5 years with longer policy terms.
Kotak Platinum Edge is a power-packed plan that enables investors to customize the plan as per their requirements.
Kotak Platinum Edge plan allows the investor to choose the level of protection they require. Limited premium payment option and a choice of nine funds allow the desired flexibility and convenience.
For more Information About Insurance Policy.
Kotak Mahindra Insurance
Kotak Super Advantage is a plan that addresses the financial needs of investors while building long-term savings for their future.
Kotak Super Advantage Plan invests 100% of premiums from second year gone and provides guaranteed returns of up to 280% per cent of the first year premium on maturity. Further attractive the return is addition of 3% per cent of average Fund Value of the last three policy years on maturity.
Kotak Guaranteed Pension Builder is a Retirement Plan that enables systematic savings for retirement. The plan offers Capital Guarantee, a feature that allows equity disclosure while minimizing the associated risk as the total premium paid by the investor is guaranteed at maturity.
Kotak Guaranteed Pension Builder plan offers safety of Pension Guarantee Fund, a fund that invests in equity or debt depending upon the market condition and delivers returns. Limited period payment option in this plan allows suitable payment periods of 3 and 5 years with longer policy terms.
Kotak Platinum Edge is a power-packed plan that enables investors to customize the plan as per their requirements.
Kotak Platinum Edge plan allows the investor to choose the level of protection they require. Limited premium payment option and a choice of nine funds allow the desired flexibility and convenience.
For more Information About Insurance Policy.
Kotak Mahindra Insurance
Tuesday, February 16, 2010
LIC looks to wash up Rs 18,000 cr from new Ulip plan
The country’s largest life insurer, Life Insurance Corporation of India (LIC), is aiming to collect Rs 18,000 crore through its new close-ended unit linked insurance plan (Ulip) — its highest target since it launched the Jeevan Astha scheme in December 2008.
Hoping to cash in on the demand for tax-saving options ahead of the close of the financial year, LIC has launched Wealth Plus, an ULIP guaranteeing returns equal to the highest net asset value (NAV) during seven years, while the policy term is eight years. It is available in two premium payment options — a term of three years and single premium.
“This product is available for a limited period and we will close it after the target is met,” said LIC Managing Director DK Mehrotra.
The life insurer had set itself a motivated target of Rs 25,000 crore for its close-ended scheme Jeevan Astha launched last year. However, collections fell short of opportunity, as LIC only managed to collect Rs 10,000 crore.
Insurance companies do around 40 per cent of their total annual business in the last three months of a financial year. “We were waiting for the stock market to correct. Keeping in view the unpredictability in the market, we have launched this product which guarantees the highest NAV of seven years,” added Mehrotra.
Life Insurance Companies have revised their existing product structures and lowered charges from January 1, as mandated by the insurance regulator. They have also come up with NAV-guaranteed products in the current financial year.
“With LIC coming up with such a product, many insurance companies will see a refuse in the estimated new business,” said a senior executive of a life insurance company.
Wealth Plus is a close-ended product with minimum age of entry being 10 years and the maximum 65 years. While the policy term is eight years, the premium paying term of the policy is three years. While the minimum premium is Rs 20,000, there is no cap on the maximum premium. Premium allocation charge for single premium up to Rs 4 lakh is 5 per cent, and above Rs 4 lakh, it is 4.5 per cent. For regular premium, allocation charges are 12 per cent for premium from Rs 20,000 to Rs 2 lakh, and thereafter it is 2.5 per cent. The fund management charge is 1 per cent, which is capped at 1.25 per cent by the regulator.
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LIC Policy
Hoping to cash in on the demand for tax-saving options ahead of the close of the financial year, LIC has launched Wealth Plus, an ULIP guaranteeing returns equal to the highest net asset value (NAV) during seven years, while the policy term is eight years. It is available in two premium payment options — a term of three years and single premium.
“This product is available for a limited period and we will close it after the target is met,” said LIC Managing Director DK Mehrotra.
The life insurer had set itself a motivated target of Rs 25,000 crore for its close-ended scheme Jeevan Astha launched last year. However, collections fell short of opportunity, as LIC only managed to collect Rs 10,000 crore.
Insurance companies do around 40 per cent of their total annual business in the last three months of a financial year. “We were waiting for the stock market to correct. Keeping in view the unpredictability in the market, we have launched this product which guarantees the highest NAV of seven years,” added Mehrotra.
Life Insurance Companies have revised their existing product structures and lowered charges from January 1, as mandated by the insurance regulator. They have also come up with NAV-guaranteed products in the current financial year.
“With LIC coming up with such a product, many insurance companies will see a refuse in the estimated new business,” said a senior executive of a life insurance company.
Wealth Plus is a close-ended product with minimum age of entry being 10 years and the maximum 65 years. While the policy term is eight years, the premium paying term of the policy is three years. While the minimum premium is Rs 20,000, there is no cap on the maximum premium. Premium allocation charge for single premium up to Rs 4 lakh is 5 per cent, and above Rs 4 lakh, it is 4.5 per cent. For regular premium, allocation charges are 12 per cent for premium from Rs 20,000 to Rs 2 lakh, and thereafter it is 2.5 per cent. The fund management charge is 1 per cent, which is capped at 1.25 per cent by the regulator.
For more Information About Insurance Policy.
LIC Policy
Wednesday, February 10, 2010
LIC of India -Vizag eyes 37 growths in new premium income
The Visakhapatnam distribution of Life Insurance Corporation of India (LIC) expects a 37 growth in new premium set in the current financial year as compared with last financial.
The division collected Rs 290 crore new premiums in 2007-08 and this year it is aiming for Rs 400 crore. Up to January, it collected Rs 240 crore. “We are convinced of mobilizing another Rs 160 crore during February and March,” D Nageswara Rao, senior divisional manager, LIC Visakhapatnam, told media persons here on Tuesday.
He said, LIC on Tuesday introduced its new ULIP Plan — Wealth Plus in Vizag zone. “We expect the new policy to take Rs 60 crore new premium by the end of March,”
During the last financial year, the Vizag division collected Rs 1,300 crore new premiums and is targeting Rs 1,600 crore this year. Till January, this amount stands at Rs 1,000 crore, he added.
The corporation generates only 3(%) per cent of its total business through another channels, which it aims to make it to 10(%) per cent by 2012.
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LIC Policy
The division collected Rs 290 crore new premiums in 2007-08 and this year it is aiming for Rs 400 crore. Up to January, it collected Rs 240 crore. “We are convinced of mobilizing another Rs 160 crore during February and March,” D Nageswara Rao, senior divisional manager, LIC Visakhapatnam, told media persons here on Tuesday.
He said, LIC on Tuesday introduced its new ULIP Plan — Wealth Plus in Vizag zone. “We expect the new policy to take Rs 60 crore new premium by the end of March,”
During the last financial year, the Vizag division collected Rs 1,300 crore new premiums and is targeting Rs 1,600 crore this year. Till January, this amount stands at Rs 1,000 crore, he added.
The corporation generates only 3(%) per cent of its total business through another channels, which it aims to make it to 10(%) per cent by 2012.
For More Information About Insurance Policy.
LIC Policy
Tuesday, February 9, 2010
LIC of India launches 'Wealth Plus' plan
Looking to the demands of guaranteed benefits and unit linked policies depends on share market LIC has decided to begin 'Wealth Plus' close-ended plan. Zonal Manager GB Pandey informed media that this plan has guaranteed fund value. Other features of the plan are -
The plan would open on February 9 for a maximum period of three months. It is a ULIP with term for 8 years provided that life covers also. At the end of policy term and the policy is in full power, payment of fund value will be made based on the highest NAV over the first 7 years of the policy or the NAV as applicable at the end of the policy terms whichever is higher.
Guarantee will be applicable only for payment to be made at the end of the policy terms - 8 years. There will be a complete life cover for 2 years after finishing point of policy term. Premium payment under this plan is limited to single or 3 years. With this plan accident benefit facility is also available. In case of death of policy holder during policy term and the policy is in full force, the nominee shall get the sum assured under the basic plan along with the policyholders fund value.
In case of death after the policy term but before the failing of the extended life cover period, the nominee will receive the sum assured under the basic plan.
Lock in period for this policy is 3 years and it can be surrendered only during the policy terms after achievement of third year. The minimum premium is Rs 20000 for three years term policy and there is no limit on maximum premium.
For More Information About Insurance Policy.
LIC Policy
The plan would open on February 9 for a maximum period of three months. It is a ULIP with term for 8 years provided that life covers also. At the end of policy term and the policy is in full power, payment of fund value will be made based on the highest NAV over the first 7 years of the policy or the NAV as applicable at the end of the policy terms whichever is higher.
Guarantee will be applicable only for payment to be made at the end of the policy terms - 8 years. There will be a complete life cover for 2 years after finishing point of policy term. Premium payment under this plan is limited to single or 3 years. With this plan accident benefit facility is also available. In case of death of policy holder during policy term and the policy is in full force, the nominee shall get the sum assured under the basic plan along with the policyholders fund value.
In case of death after the policy term but before the failing of the extended life cover period, the nominee will receive the sum assured under the basic plan.
Lock in period for this policy is 3 years and it can be surrendered only during the policy terms after achievement of third year. The minimum premium is Rs 20000 for three years term policy and there is no limit on maximum premium.
For More Information About Insurance Policy.
LIC Policy
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