16-Mar-2012
Source : Magicgyan Team
Government has reduced the interest rate on deposits
in Employees Provident Fund from 9.5% to 8.25% for 2011-12. This is
likely to affect over 4.7 crore subscribers.
This cut was proposed by the Finance Ministry and a notification was issued by the Labour Ministry, official sources said.
The Employees’ Provident Fund Organisation (EPFO) had
provided 9.5% interest rate to its subscribers for 2010-11 after it
found Rs 1,731 crore surplus in its books of account.
With inputs from PTI
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Saturday, March 17, 2012
Insurance Review: LIC Jeevan Vriddhi
15-Mar-2012
Source : Economic Times
By Bakul Chugan Tongia,
Product Details
LIC’s Jeevan Vriddhi is a single premium policy with a 10-year term that offers guaranteed returns on maturity. The guaranteed additions are determined by the age of the policyholder and the amount of single premium paid. The death benefit in this scheme is equivalent to five times the amount of premium paid
Key Features
The guaranteed maturity benefit ranges from 4.70% to 7.09% CAGR (compounded annual growth rate) for a period of 10 years. The same is determined by the age of the policyholder at the time of investing from 8 years to 50 years. However, in the case of single premium payments above `1 lakh, there is an increase of about 0.46% CAGR in the guaranteed maturity benefit. For single premium payments between `50,000 and up to `1 lakh, the increase in guaranteed maturity benefit is about 0.20% CAGR for a period of 10 years.
Surrender Value
The minimum guaranteed surrender value is 90% of the amount of the single premium.
Comparative Analysis
Assuming a single premium payment of Rs.1,00,000 for a policy term of 10 years, the comparative analysis of the maturity proceeds that will accrue to various age groups from LIC Jeevan Vriddhi vis-a-vis a similar investment made in a bank fixed deposit (net of term premium to ensure life cover & taxes) is illustrated herewith:
Notes:
- Bank FD rate of 9.25% is in accordance with the interest rate currently provided by the State Bank of India for a 10-year tenure. The bank interest in the above illustration is compounded quarterly.
- We have assumed the highest tax-slab of 30.9% for post tax calculations.
- We have considered LIC’s Anmol Jeevan -single premium for 10 years, for term plan premium consideration. The final outcome may vary if one were to consider term plans offered by other insurance players at lower premiums.
- LIC may also pay loyalty additions to the policyholder at the end of the policy term of 10 years. However, these are not assured and are subject to company’s discretion then.
Source: Economic Times
Source : Economic Times
By Bakul Chugan Tongia,
Product Details
LIC’s Jeevan Vriddhi is a single premium policy with a 10-year term that offers guaranteed returns on maturity. The guaranteed additions are determined by the age of the policyholder and the amount of single premium paid. The death benefit in this scheme is equivalent to five times the amount of premium paid
Key Features
The guaranteed maturity benefit ranges from 4.70% to 7.09% CAGR (compounded annual growth rate) for a period of 10 years. The same is determined by the age of the policyholder at the time of investing from 8 years to 50 years. However, in the case of single premium payments above `1 lakh, there is an increase of about 0.46% CAGR in the guaranteed maturity benefit. For single premium payments between `50,000 and up to `1 lakh, the increase in guaranteed maturity benefit is about 0.20% CAGR for a period of 10 years.
Surrender Value
The minimum guaranteed surrender value is 90% of the amount of the single premium.
Comparative Analysis
Assuming a single premium payment of Rs.1,00,000 for a policy term of 10 years, the comparative analysis of the maturity proceeds that will accrue to various age groups from LIC Jeevan Vriddhi vis-a-vis a similar investment made in a bank fixed deposit (net of term premium to ensure life cover & taxes) is illustrated herewith:
Notes:
- Bank FD rate of 9.25% is in accordance with the interest rate currently provided by the State Bank of India for a 10-year tenure. The bank interest in the above illustration is compounded quarterly.
- We have assumed the highest tax-slab of 30.9% for post tax calculations.
- We have considered LIC’s Anmol Jeevan -single premium for 10 years, for term plan premium consideration. The final outcome may vary if one were to consider term plans offered by other insurance players at lower premiums.
- LIC may also pay loyalty additions to the policyholder at the end of the policy term of 10 years. However, these are not assured and are subject to company’s discretion then.
Source: Economic Times
LIC pays Rs 1,137.99 crore as dividend to government for 2010-11
15-Mar-2012
Source : PTI
Country’s largest insurer Life Insurance Corporation of India (LIC) has paid Rs 1,137.99 cr to the Government of India as dividend for 2010-11.
The dividend cheque was handed over by LIC current-in- charge Chairman D K Mehrotra to the Finance Minister Pranab Mukherjee yesterday, the state-owned insurer said in a statement today.
LIC had declared a valuation surplus of Rs 22,752.71 crore for the financial year ending 2011. This surplus was arrived at, after the annual actuarial valuation was done and all liabilities were accounted, it said.
The balance amount of Rs 21,614.72 crore would be ploughed back to the policyholders as bonus, it added.
For the 2010-11, it said, LIC has received a total premium income of Rs 2,03,358 crore as against Rs 1,85,986 crore in the previous showing a growth rate of 9.34 per cent, it said.
The total life fund of LIC stood at Rs 11,51,200.58 crore as against Rs 9,99,517.59 crore in the previous year. The total assets of the company rose to Rs 13,17,416 crore from Rs 11,52,057.21 crore in the previous year.
During 2010-11, LIC settled more than 1.89 crore claims for an aggregate amount of over Rs 57,557 crore. The ratio of claims outstanding at the end of the year to the total claims payable during the year stood at 1.20 per cent.
Source : PTI
Country’s largest insurer Life Insurance Corporation of India (LIC) has paid Rs 1,137.99 cr to the Government of India as dividend for 2010-11.
The dividend cheque was handed over by LIC current-in- charge Chairman D K Mehrotra to the Finance Minister Pranab Mukherjee yesterday, the state-owned insurer said in a statement today.
LIC had declared a valuation surplus of Rs 22,752.71 crore for the financial year ending 2011. This surplus was arrived at, after the annual actuarial valuation was done and all liabilities were accounted, it said.
The balance amount of Rs 21,614.72 crore would be ploughed back to the policyholders as bonus, it added.
For the 2010-11, it said, LIC has received a total premium income of Rs 2,03,358 crore as against Rs 1,85,986 crore in the previous showing a growth rate of 9.34 per cent, it said.
The total life fund of LIC stood at Rs 11,51,200.58 crore as against Rs 9,99,517.59 crore in the previous year. The total assets of the company rose to Rs 13,17,416 crore from Rs 11,52,057.21 crore in the previous year.
During 2010-11, LIC settled more than 1.89 crore claims for an aggregate amount of over Rs 57,557 crore. The ratio of claims outstanding at the end of the year to the total claims payable during the year stood at 1.20 per cent.
Budget 2012: Basic exemption limit for individuals increased by a small margin
16-Mar-2012
Source : Magicgyan Team
Budget 2012 has increased the basic exemption limit for individuals across various slabs by a small margin.
Exemption limit has been raised to Rs 2 lakhs for all individual tax payers, contrary to the general expectations of raising exemption limit to Rs 3 lakhs.
The proposed tax slabs for financial year 2012-2013 are as follow:
Income up to Rs 2 lakh - nil
Income between Rs 2 lakh to Rs 5 lakh - 10%
Income between Rs 5-10 lakh - 20%
Inncome above Rs 10 lakh - 30 %
Source : Magicgyan Team
Budget 2012 has increased the basic exemption limit for individuals across various slabs by a small margin.
Exemption limit has been raised to Rs 2 lakhs for all individual tax payers, contrary to the general expectations of raising exemption limit to Rs 3 lakhs.
The proposed tax slabs for financial year 2012-2013 are as follow:
Income up to Rs 2 lakh - nil
Income between Rs 2 lakh to Rs 5 lakh - 10%
Income between Rs 5-10 lakh - 20%
Inncome above Rs 10 lakh - 30 %
LIC pays 971 crore as advance tax
16-Mar-2012
Source : Magicgyan Team
LIC has paid Rs 971 crore as advance tax.
State Bank tops the list of highest advance tax paying institutions, having paid Rs 1,650 crore this year, followed by the insurance giant LIC, which paid Rs 40 crore more over the previous year at Rs 971 crore.
With inputs from PTI
Source : Magicgyan Team
LIC has paid Rs 971 crore as advance tax.
State Bank tops the list of highest advance tax paying institutions, having paid Rs 1,650 crore this year, followed by the insurance giant LIC, which paid Rs 40 crore more over the previous year at Rs 971 crore.
With inputs from PTI
Saturday, March 3, 2012
India loses $20bn annually to road accidents
24-Feb-2012
Source : Economic Times
India loses $20 billion due to road accidents annually, which the World Health Organization (WHO) estimates is enough to feed 50% of the nation’s malnourished children. Officially, at least 1.34 lakh people died on Indian roads in 2010, while experts claim the figure could be about 1.5 lakh considering the under reporting of such cases.
WHO representative in India Dr Nata Menabde while addressing international road safety experts, including the senior IPS officers at a convention held at College of Traffic Management (CTM) in Faridabad, said that there is a dire need to save the vulnerable road users to reduce the huge annual financial loss. She urged that strategies have to be devised to save lives, particularly pedestrians, cyclists and two-wheeler riders besides putting curbs on drunk driving and stricter enforcement of wearing of helmets and seat belts.
"We need to see how we build our road, investigate properly how accidents occur and police probe these cases. There should be one group or body that should bring all sectors together, and it should announce a plan to reduce fatalities," Menabde said.
Highlighting how road accidents and fatalities have never grabbed attention, ex-home secretary G K PIllai said while 2,000 people dying annually in terrorist acts become a national issue, 1.34 lakh road fatalities have never been highlighted.
International experts felt that the high use of cellphones while driving is increasing the chance of accidents globally. "The chance of accidents increase four-fold in such cases," said Adam Briggs, former chief constable of the UK.
CTM president Rohit Baluja said that to reduce the accidents and fatalities on Indian roads, there is a need to have proper probe to unearth the cause of accidents. "The government data claims that only 1% of the deaths are caused due to faulty roads, which is unacceptable. When you have wrong data, how can you prepare an action plan to fix the problems? How many engineers have been jailed for any accident?" he asked.
Even senior traffic officials from Mumbai, Chennai, Bangalore, Haryana, Rajasthan admitted that the investigators looking into accident cases have little training to probe them. "The usual course of investigation is on predictable lines: bigger vehicle is the culprit, dead is the victim and alive is the accused. We need to find the reasons behind such accidents as it is done in other countries," said Vivek Phansalkar, joint commissioner of Mumbai Traffic Police.
Source : Economic Times
India loses $20 billion due to road accidents annually, which the World Health Organization (WHO) estimates is enough to feed 50% of the nation’s malnourished children. Officially, at least 1.34 lakh people died on Indian roads in 2010, while experts claim the figure could be about 1.5 lakh considering the under reporting of such cases.
WHO representative in India Dr Nata Menabde while addressing international road safety experts, including the senior IPS officers at a convention held at College of Traffic Management (CTM) in Faridabad, said that there is a dire need to save the vulnerable road users to reduce the huge annual financial loss. She urged that strategies have to be devised to save lives, particularly pedestrians, cyclists and two-wheeler riders besides putting curbs on drunk driving and stricter enforcement of wearing of helmets and seat belts.
"We need to see how we build our road, investigate properly how accidents occur and police probe these cases. There should be one group or body that should bring all sectors together, and it should announce a plan to reduce fatalities," Menabde said.
Highlighting how road accidents and fatalities have never grabbed attention, ex-home secretary G K PIllai said while 2,000 people dying annually in terrorist acts become a national issue, 1.34 lakh road fatalities have never been highlighted.
International experts felt that the high use of cellphones while driving is increasing the chance of accidents globally. "The chance of accidents increase four-fold in such cases," said Adam Briggs, former chief constable of the UK.
CTM president Rohit Baluja said that to reduce the accidents and fatalities on Indian roads, there is a need to have proper probe to unearth the cause of accidents. "The government data claims that only 1% of the deaths are caused due to faulty roads, which is unacceptable. When you have wrong data, how can you prepare an action plan to fix the problems? How many engineers have been jailed for any accident?" he asked.
Even senior traffic officials from Mumbai, Chennai, Bangalore, Haryana, Rajasthan admitted that the investigators looking into accident cases have little training to probe them. "The usual course of investigation is on predictable lines: bigger vehicle is the culprit, dead is the victim and alive is the accused. We need to find the reasons behind such accidents as it is done in other countries," said Vivek Phansalkar, joint commissioner of Mumbai Traffic Police.
Business gets worse for private life insurers; MetLife bucks trend
01-Mar-2012
Source : PTI
Indicating tough times ahead for the private life insurers, their first-year premium, an indicator of new business growth in the sector, dipped by 15 per cent last month, although MetLife bucked the trend.
As per the latest data released by sector regulator IRDA (Insurance Regulatory and Development Authority), the life insurance industry registered a growth in their overall first year premium collection in January this year.
However, the private sector players continued with a downward trend and their first year premium dipped by 15 per cent from January 2011 levels to Rs 2,451.22 crore.
The decline in January 2012 was worse than the previous month December 2011, when the first year premium of private life insurers dipped by 8 per cent.
Private player MetLife, however, saw its first year premium grow 232 per cent in January 2012 to Rs 203.6 crore.
Helped by its better-than-peers performance, MetLife India became the fifth largest among 23 private sector life insurers in the country in January, up from its sixth position in the previous month. It was ranked 15th in April 2011.
As per IRDA data, MetLife’s market share has also doubled to 3.8 per cent in the first ten months of the current fiscal (April 2011 to January 2012), from 1.9 per cent in the same period of the previous fiscal.
For the month of January 2012, MetLife commanded a share of 8.3 per cent in total new premium for private sector, up from 6.86 per cent in the previous month. This is the highest market share in a month since its inception.
The total new premium for the sector, including that of state-run LIC, stood at Rs 9,543 crore in January 2012, up 15 per cent from Rs 8,301 crore in the same month last year.
LIC’s new business grew by 31 per cent last month, while its market shares rose to 74 per cent from 65 per cent in January 2011.
The business conditions have not been very encouraging in the insurance sector in the recent past and the IRDA Chairman J Harinarayan said earlier this month that the sector would see a de-growth of 13-14 per cent this fiscal.
The first year premium of life insurers declined by 17 per cent to Rs 71,952 crore as on December 31, 2011 in the current fiscal, down from Rs 86,697 crier in the year-ago period.
The decline in the business of private insurers was higher at 20 per cent compared to the state-owned insurer, Life Insurance Corporation of India, which suffered a 15 per cent dip in the first-year premium.
Bank of America Merrill Lynch said in a recent report that the top-line growth of the Indian insurance industry has already taken a big hit after the new regulations.
Source : PTI
Indicating tough times ahead for the private life insurers, their first-year premium, an indicator of new business growth in the sector, dipped by 15 per cent last month, although MetLife bucked the trend.
As per the latest data released by sector regulator IRDA (Insurance Regulatory and Development Authority), the life insurance industry registered a growth in their overall first year premium collection in January this year.
However, the private sector players continued with a downward trend and their first year premium dipped by 15 per cent from January 2011 levels to Rs 2,451.22 crore.
The decline in January 2012 was worse than the previous month December 2011, when the first year premium of private life insurers dipped by 8 per cent.
Private player MetLife, however, saw its first year premium grow 232 per cent in January 2012 to Rs 203.6 crore.
Helped by its better-than-peers performance, MetLife India became the fifth largest among 23 private sector life insurers in the country in January, up from its sixth position in the previous month. It was ranked 15th in April 2011.
As per IRDA data, MetLife’s market share has also doubled to 3.8 per cent in the first ten months of the current fiscal (April 2011 to January 2012), from 1.9 per cent in the same period of the previous fiscal.
For the month of January 2012, MetLife commanded a share of 8.3 per cent in total new premium for private sector, up from 6.86 per cent in the previous month. This is the highest market share in a month since its inception.
The total new premium for the sector, including that of state-run LIC, stood at Rs 9,543 crore in January 2012, up 15 per cent from Rs 8,301 crore in the same month last year.
LIC’s new business grew by 31 per cent last month, while its market shares rose to 74 per cent from 65 per cent in January 2011.
The business conditions have not been very encouraging in the insurance sector in the recent past and the IRDA Chairman J Harinarayan said earlier this month that the sector would see a de-growth of 13-14 per cent this fiscal.
The first year premium of life insurers declined by 17 per cent to Rs 71,952 crore as on December 31, 2011 in the current fiscal, down from Rs 86,697 crier in the year-ago period.
The decline in the business of private insurers was higher at 20 per cent compared to the state-owned insurer, Life Insurance Corporation of India, which suffered a 15 per cent dip in the first-year premium.
Bank of America Merrill Lynch said in a recent report that the top-line growth of the Indian insurance industry has already taken a big hit after the new regulations.
LIC saves ONGC auction
02-Mar-2012
Source : NDTV
The government decision to auction 42.77 crore ONGC shares almost turned into a flop show as there weren’t enough bidders.
Life Insurance Corporation saved face by bidding for the rest of the shares. LIC is believed to have invested close to Rs 4,000 crore
Source : NDTV
The government decision to auction 42.77 crore ONGC shares almost turned into a flop show as there weren’t enough bidders.
Life Insurance Corporation saved face by bidding for the rest of the shares. LIC is believed to have invested close to Rs 4,000 crore
LIC to pay claims in South via fund transfer system from April
02-Mar-2012
Source : PTI
The settling of LIC’s claims through the National Electronic Funds Transfer ( NEFT) system across four states in South India will take off in April, a senior official said.
The move is aimed at reducing the use of cheques in settling claims to avoid delays due to their getting lost or damaged, said LIC Zonal Manager D D Singh.
"We are going live from April.. Almost all the 13 divisions of LIC are ready to offer the service (from April onwards)..", Singh told.
Earlier, LIC undertook this proposal as a pilot study in Kochi (in Kerala) and also, in some parts of Tamil Nadu. Following its success, it has been decided to implement it across the south zone, he said.
LIC currently has about 39 crore customers across the four southern states, he added.
Stating that the proposal would ensure "fast" and "secured" process of depositing the claims of a customer, Singh said leading banks from both private and public sector banks have tied-up with LIC for this service.
"This is just to ensure accuracy. Today, everybody opts for a bank account and with this system, we will be able to reach the customer directly (for settling the claims)..", a company spokesperson said.
On future plans, Singh said they have planned to issue about 51 lakh policies by end of this month. Last fiscal, the company issued about 50 lakh polices across all its segments.
"Every year, we grow by 10-15 per cent.This year we are expecting the same..", he said.
Source : PTI
The settling of LIC’s claims through the National Electronic Funds Transfer ( NEFT) system across four states in South India will take off in April, a senior official said.
The move is aimed at reducing the use of cheques in settling claims to avoid delays due to their getting lost or damaged, said LIC Zonal Manager D D Singh.
"We are going live from April.. Almost all the 13 divisions of LIC are ready to offer the service (from April onwards)..", Singh told.
Earlier, LIC undertook this proposal as a pilot study in Kochi (in Kerala) and also, in some parts of Tamil Nadu. Following its success, it has been decided to implement it across the south zone, he said.
LIC currently has about 39 crore customers across the four southern states, he added.
Stating that the proposal would ensure "fast" and "secured" process of depositing the claims of a customer, Singh said leading banks from both private and public sector banks have tied-up with LIC for this service.
"This is just to ensure accuracy. Today, everybody opts for a bank account and with this system, we will be able to reach the customer directly (for settling the claims)..", a company spokesperson said.
On future plans, Singh said they have planned to issue about 51 lakh policies by end of this month. Last fiscal, the company issued about 50 lakh polices across all its segments.
"Every year, we grow by 10-15 per cent.This year we are expecting the same..", he said.
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