Sector
Update: Insurance
Government of India is trying the best to pass the insurance reform bill
in Rajya Sabha but the govt have no majority in Rajya Sabha and important bills
in this session has stuck.
Impact on insurance industry of new insurance
bill:
In new insurance bill, IRDA has to decide on the commission of insurance
agents. Health Insurance entry capital for new player will remain same at Rs
100 crore. According to this bill, IRDA will free to formulate acts and rules
and allowed to fix penalties.
One more important and lesser known provision in this new insurance bill
which can increase the no. of rejected claim. Under the current rule, an
insurance policy cannot be called into question after 2 years of policy issued.
Under the new amendment in this bill this period would be 3 years now. The discrepancy
in the new bill is that it holds insured responsible for any fraud conduct by
the insurance agent whereas according to insurance regulation, which deems
agent to be representative of the company.
Life insurance council has recommended for reduction in service tax to the
government. At present at the time of getting policy mature proceed service tax
levied on PAN card holder is 2% and non PAN card holder is 20% of the maturity
amount whereas other financial products like mutual funds and fixed deposit do
not attract service tax on maturity.
Now onwards, group health insurance cover will become more expensive for
companies where hospitalization claims from employees exceed the premium paid.
The IRDA will penalize such insurance companies as due to these losses individual
policy holder pay more premium. The regulator has also asked insurance
companies to come up with saving-linked insurance plan so that individual buyers
do not need to pay more as the age grows.
More group health insurance policies are now offering OPD (outpatient
department) expenses. With the growing competition, most of insurance companies
have begun to cover day-care procedures in hospitals instead of the mandatory
overnight stays.
If you have doubt about investment product
and want more information regarding investment or you need investment services,
feel free to ask us. We also conduct the seminar on investment and financial
planning. If you are interested for seminar in your city just drop the mail.
Warm regards,
Arvind Trivedi
Certified Financial Planner
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