The central government has introduced a new dated security of 50-year tenor in its borrowing calendar for the second half of the current financial year—a long-standing demand by life insurance companies, particularly Life Insurance Corporation of India. "In response to market demand for ultra-long duration securities, it has been decided to introduce a new dated security of 50-year tenor," the Reserve Bank of India (RBI) said while issuing the borrowing calendar for the second half of the financial year. Market participants said that the Rs 30,000 crore supply in the 50-year bond will be absor ..read more

To make the surety bond business more attractive, the government is looking at making relevant changes in the Insolvency and Bankruptcy Code (IBC) to consider insurers as financial creditors in case of default of infra projects. “The surety bond issued by a general insurance company is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee). The surety is a company that provides the financial guarantee to the obligee (usually a government entity) that the principal (business owner) will fu ..read more

The share of LIC in monthly new business premium (NBP) in the life insurance sector declined to 58.50 per cent in September 2023 from 68.25 per cent in September 2022 — a drop of 975 basis points — owing to shortcomings in the product and distribution side of business. However, the market share saw a marginal uptick from the 57.37 per cent recorded in August this year. According to the monthly business data released for September 2023 by the Life Insurance Council, the NBP of LIC up to September 2023 stood at Rs 92,462.62 crore as compared to about Rs 1.25 trillion in the same period a year ag ..read more

The GST Council will soon provide clarity on input tax credit for life insurers, following a recent Rs 290-crore demand on Life Insurance Corporation — a move that is expected to come as a relief for LIC. The complication on GST arises in case of traditional life policies or endowment plans, where GST is levied on only a portion of the plan. As a result, on the first-year premiums, GST is levied at 4.5%, while for subsequent years, it is levied at 2.25%. That is because these policies have two components — an insurance component, which attracts GST, and a savings component, which is treated ak ..read more

Insurtech startup InsuranceDekho said it has raised $60 million in a Series B funding round led by Japan’s Mitsubishi UFJ Financial Group (MUFG); insurer BNP Paribas Cardif through its insurtech fund managed by European investment major Eurazeo; Beams Fintech Fund; and Yogesh Mahansaria Family Office. A person aware of the transaction said the investment valued the company, the insurance unit of used-car platform CarDekho, at around $600 million. While a large part of the funding round is equity, a small portion has been raised via debt, the company said. InsuranceDekho’s existing investors, T ..read more

The life insurance industry has reported a lacklustre performance in the first six months of the financial year 2023-24 (FY24) with the new business premium falling 12.97 per cent, mainly due to the decline in premium mobilisation by Life Insurance Corporation (LIC) and the changes in the tax structure in high value policies. Total premium collection (new business) declined to Rs 158,376 crore during the six months as against Rs 181,976 crore in the same period a year ago. LIC’s premium collection fell to Rs 92,642 crore during the period from Rs 124,191 crore. LIC’s group single premium for t ..read more

Over 1 lakh employees and nearly 13 lakh agents of the Life Insurance Corporation of India (LIC) will have something to cheer, as the Finance Ministry approved welfare measures, including enhancing the family pension and gratuity limit. According to a statement by the Finance Ministry, the gratuity limit for agents has been raised to Rs. 5 lakh from Rs. 3 lakhs. “It will bring substantial improvements to the working condition and benefits of LIC agents,” the statement said. It also approved a proposal to enable reappointed agents to be eligible for renewal commissions, providing them with incr ..read more

IRDAI has asked general insurers to provide cover to employees travelling in employer's vehicle. The Madras High Court had directed IRDAI to make IMT-29 compulsory as an in-built coverage for employees while issuing a private car policy for such vehicles. IMT stands for India Motor Tariff. "All general insurers carrying on motor insurance business shall provide the cover to employees travelling in an employer's vehicle (including paid driver, if applicable) under IMT-29 of the Indian Motor Tariff, compulsorily as an in-built coverage while issuing private car policy for such vehicles," IRDAI s ..read more

Asserting that the current Bank Guarantee capacity of banks is insufficient to meet the credit demand for infrastructure development in the next five years, IRDAI Chairman Debasish Panda has called upon stakeholders to come together to tap the rich potential of “Surety Bonds” in meeting the gap in demand. The current regulatory framework (for Surety Bonds) presents the general insurance industry with a unique opportunity to diversify their portfolio and play an important role in nation-building, Panda said at a CII Roundtable in the capital. The Roundtable saw participation from senior officia ..read more

Bima Vistaar, a first of its kind all-in-one affordable insurance product offering life, health and property cover is likely to be launched soon. “The product is in the final stages of design based on discussions with Life and General Insurance Councils and the industry,” a senior official of the IRDAI told. This comprehensive, standardised cover was proposed by IRDAI Chairman Debashish Panda as part of a series of reforms aimed at realising the regulator’s vision of providing cover to everyone by 2047. Discussions on the ‘affordable’ pricing of the product are on the last legs and the inclusi ..read more