"general insurance"

Insurers will have to deal with more taxes in GST Regime: Report

Posted on 23 Aug 2016 by Easypolicy

MUMBAI: Insurance companies will potentially have to deal with more taxes once the GST is implemented with the emergence of the Centre and states as dual stakeholders, a report said. 

The number of taxes will increase as calculation of input-output tax credits will be done separately for each individual state in which they are earned, it added.

Insurance, being a service industry, deals with one single tax (service tax) with one administering authority (the Central government), the EY and CII 'Insurer of the Future' report said.

"One of the significant impacts on insurance industry under the dual GST structure would be the emergence of dual stakeholders in every taxable supply of service, the state government, where the supply is made and the Centre," it said.

From dealing with a central service tax for pan-India operations, insurers now will potentially start dealing with 38 taxes, including 35 state GSTs (SGSTs), including Union Territories, one Central GST (CGST) and IGST on inter-state supplies, it pointed out.

The report added that the reinsurance industry is undergoing a major change, with foreign insurers being permitted to set up branch offices in India.

The new rules are expected to create an even greater focus on services by foreign insurers as they compete for a share of the market, it added. 

The market for emerging risks such as cyber insurance, customised liability insurance and specific disease insurance is expected to grow, driven by the willingness of customers to pay a premium for specialised and innovative solutions.

Reinsurers have a key role to play in helping the insurance industry innovate and cover new frontiers, as the industry looks to them when it comes to exploring the unknown.

The report also stated that technology will form the backbone for this transformation, acting as both an enabler and disruptor.

Its role is expected to rapidly change from its current ancillary function to becoming a core competency for insurance businesses.
Solutions such as data analytics, robotics process automation, block chain and cloud, which is already being implemented, however, is only the tip of the iceberg in terms of their potential applications and overall ability to transform businesses.

The digital bar for insurers is rising continuously and the companies that can meet this challenge will build greater customer loyalty, improve cost efficiency and increase profitability, it added.

Source: Economic Times

Dated: 12th August, 2016

IRDAI Directs Insurers Not to Delay Claim Payments

Posted on 28 Jul 2016 by Easypolicy

Irdai has asked life insurers not to withhold or delay settlement of claims of policyholders if there is any objection from claimants to fill the discharge voucher. 

Discharge voucher is required to be furnished by claimants before raising a claim.

It is a standard practice by life insurers to inform about maturity date and amount of a claim to policyholders through a blank discharge voucher about 2-3 months in advance.

Policyholders have to furnish the information in discharge voucher and submit it back to the insurance company to raise a claim.

"Where the policyholder/claimant expresses unwillingness or reluctance or objection for any reason to execute the advance discharge voucher or to accept the amount, the Life Insurer should not insist on the discharge voucher or make it conditional for releasing the policy payment", Irdai said in a circular issued today.

In such an event the life insurer shall not withhold or delay the payment for this reason but make the policy payment to discharge its contractual obligations, it said further, adding the life insurer may preserve the proof of making the payment.

The discharge voucher sent to policyholder/claimant should necessarily contain policy number and the nature of payment and amount of claim under different heads including deductions, if any, and other relevant details, Irdai said. 

Insurance Regulatory and Development Authority (Irdai) said the provision was being made to protect the interests of policyholders as well as keeping in view the legal principles.

Contractual obligations are discharged by life insurers when making policy payments in cases of maturity or death claims or surrender of policy.

Source: Economic Times

Dated: 14th July, 2016

LNT acquired by HDFC Ergo

Posted on 22 Jun 2016 by Easypolicy

MUMBAI, Genral insurance giant HDFC Ergo, a joint venture between major housing development financier HDFC and German insurer Ergo International, have planned to buy L&T General Insurance for Rs. 551 crore. It would be the first buyout in the country’s general insurance industry.

“This transaction marks the beginning of this consolidation phase”, says Deepak Parekh, chairman of HDFC and HDFC Ergo General Insurance, on Friday.

The deal is valued at 1.1 times the gross premium, which is 3.9 times the book value of L&T General Insurance Company.

HDFC Ergo will now apply to the insurance regulating authority, IRDA and fair trade authority Competition Commission of India (CCI) for getting regulatory approvals to acquire 100% share of L&T General Insurance.

The acquisition will help HDFC Ergo become the third-largest private general insurer, behind ICICI Lombard and Bajaj Allianz General Insurance, overtaking IFFCO Tokio.

Source: Economic Times

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