Tag: insurance

HPCL cancels Iran oil shipment after insurer excludes coverage

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s Hindustan Petroleum Corp (HPCL) cancelled the purchase of an Iranian oil cargo earlier this month after its insurance company refused to provide coverage for the crude because of US sanctions, three sources with knowledge of the matter said.

HPCL, India’s third-biggest state-owned refiner, renewed its installation insurance, which protects against any accidents at its refinery or storage sites, in early July. However, the new policy would not protect against any incidents involving Iranian oil processed or stored at its refineries, the sources said.

The refiner had planned to load 1 million barrels of Iranian crude onto the Suezmax tanker Ankaleshwar in early July but cancelled the purchase after it was unable to sell it on to another buyer, said the sources who declined to be identified because of the sensitivity of the matter.

India is the second-biggest buyer of Iranian crude after China and without insurance coverage to protect their plants, the country’s refineries may have to cut off their imports earlier than anticipated.

The United States said in May it plans to re-impose some sanctions against Iran starting in August, with full sanctions in place by November, after withdrawing from a 2015 accord with Iran limiting its nuclear program.

“HPCL faced problems in lifting cargo from Iran because its annual insurance policy was renewed in July after the US pulled out of the nuclear deal in May,” said one of the sources, adding the company will not be able to lift any Iranian oil.

HPCL‘s Iranian imports account for only 20,000 barrels per day (bpd) of its full demand of 316,000 bpd but other Indian refiners that take larger volumes are likely to face the same problem if their annual policy is up for renewal before November.

HPCL did not respond to requests from Reuters for a comment.

Companies have until Nov. 4 to fully wind down activities with Iran or risk exclusion from the US financial system. However, banks, shipping firms and insurance companies are already cutting ties with Iran and without financing or insurance coverage refiners will have to halt their purchases.

Iran had hoped to sell more than 500,000 bpd of oil to India during the current fiscal year that started in April, Oil Minister Bijan Zanganeh said in February.

However, the insurance issues may mean a reduction in imports even as India is intent on continuing dealings with Iran.

“The problem in procuring Iranian barrels appears to be happening much before the Nov. 4 deadline,” said Senthil Kumaran, a senior analyst at consultants FGE. “Most of the reinsurance market is based in the US so without the blessing of the US, Iranian oil buyers will find it almost impossible to take and process Iranian cargoes.”

Indian insurers rely on state-run General Insurance Corp for reinsurance, which depends on western re-insurers to hedge its risk. General Insurance did not reply to a request for comment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Over 44 lakh jobs created in 9 months till May, says EPFO data

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Retirement fund body EPFO’s payroll data suggests that as many as 4,474,859 jobs created during September 2017 to May this year. However, the retirement body lowered earlier estimate of new members enrolment by 9.57 per cent, from 4,126,138 to to 3,731,251 for September 2017-April this year.

According to the payroll data released by the Employees’ Provident Fund Organisation (EPFO) last month for September to April, as many as 4,126,138 new member were enrolled for its social security schemes to provide benefits, including provident fund, insurance and pension.

According to the latest data released yesterday the new members enrolment in May is the highest so far in last eight month at 7,43,608.

During May, the maximum number of enrollment of 2,51,526 were recorded in the age bracket of 18 to 21 years followed by 1,90,090 in 22 to 25 years age group.

The payroll data statement says that the data is provisional as updation of employees records is a continuous process and gets updated in subsequent months.

It also stated that the estimates may include temporary employees, whose contributions may not be continuous for the entire year.

For each age-wise band, the estimates are net of the members enrolled and ceased during the month as per the EPFO records, it added.

The EPFO manages social security funds of workers in the organised/semi organised sector. It runs three social security scheme Employees’ Provident Fund Scheme 1952, Employees’ Deposit Linked Scheme 1976 (EDLI) and Employees’ Pension Scheme 1995. It manages the accounts of over six crore members and a corpus of over Rs 10 lakh crore.

Earlier this year, the EPFO had started the practice of updating payroll data on its official portal. The body had also lowered its payroll data estimates earlier.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

A brief explainer about Mutual Company

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A private firm whose ownership lies with its customers is called a Mutual Company. These types of firms will rely heavily on its customers who are the very base of their firm. One common example of this type of firm are the insurance companies found across the globe.

Merits of investing in Mutual Company

Investing in a Mutual Company brings its own share of privileges to the investor. Firstly it gives the investor an opportunity acquire ownership in the very firm they are investing in to.

Another additional merit is the single minded focus that these companies show when it comes to operations. As most of these firms are formed by individuals having interest in a specific field they will often focus their operations in that particular field.

They also provide opportunity of earning maximum profits due to this specialized focus. In usual stock insurance companies stock holders and policy holders are different. This prompts these companies to often focus more on the interest and profit of stake holders rather than the people who have taken up their policy.

However, when one invests in a mutual company they will be focus of all benefits and maximum profit as they are both policy and stake holders. Thus making Mutual Companies a better pick when taking up an insurance.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IDBI Bank seeks government’s decision on LIC deal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Debt-laden banker IDBI Bank said it had decided to seek the government’s decision with respect to LIC acquiring a 51 percent stake in the bank, IDBI said in an exchange filing.

The board of insurance behemoth LIC approved the acquisition of 51 percent stake in IDBI Bank in a meeting held on Monday.

“Largely the three things are to try to look into the expression of interest by LIC in taking a 51 percent controlling stake to give them promoter status and also decide upon what will be the mode of infusion, whether by way of preferential issue of shares or through an open offer,” said GM Yadwadkar, deputy managing director, IDBI Bank.

“Almost 94 percent of IDBI Bank is held with the government of India and LIC, 86 percent is with government of India and 7.98 percent is with LIC of India and the balance 6 percent is with the public,” he added.

“So, this is the decision of the board. Now we will await the government’s responses on our letter to them and then depending on what is the communication from the government of India, based on their approvals we will again take it up in our board and take it forward,” Yadwadkar, further added.

“Representatives of the government are on the board of IDBI for conducting the banking business not for disposing of the bank itself. Majority shareholding in the bank is of the Central Government and Central Government approval is required for selling those shares,” said MR Umarji, former chief legal advisor, Indian Banks’ Association.

“Next step depends on the government process. It make have to go to the cabinet. If cabinet approval is already obtained the finance ministry will give its okay to IDBI Bank,” he added.

The company is expected to increase its stake in the bank via preferential shares, said Subhash Chandra Garg, economic affairs secretary, adding that the deal would require a nod from Sebi and RBI.

Irdai at its meeting held in Hyderabad last month had permitted LIC to increase its stake from 10.82 percent to 51 percent in IDBI Bank.

As per current regulations, an insurance company cannot own more than 15 percent in any listed financial firms.

When LIC makes a formal application for purchase of shares admitting LIC as the shareholder of the bank, IDBI’s board may have to once again approve it, said Umarji, speaking about the details of the share-acquisition.

“Once the IDBI Bank board approves the sales of shares, I don’t know whether the quantum is already stipulated or how many percentage of shares are to be sold,” he further added.

State-owned Life Insurance Corporation will now approach market regulator Sebi. As per Sebi takeover code, an acquirer has to give an open offer to the shareholders of target company on acquiring shares or voting rights of 25 percent or more.

The move will help the debt-ridden state-owned bank get a capital support of Rs 10,000- 13,000 crore.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Now, you may be able to pay health insurance premiums in installments

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Imagine a facility wherein you could pay your health insurance premium similar to an EMI. A specific amount is deducted from your account every month as a premium for the health insurance policy. This will ensure that an adequate health cover is taken with a minimum pinch on the wallet.

A proposal has been sent to the Insurance Regulatory and Development Authority of India (IRDAI) to see if this structure of premium payment can be allowed under the current regime.

“We have sent a request to the regulator. Now, we will have to wait and see if this will be permitted,” said a senior official of a large private sector general insurance company.

A regular health insurance plan of Rs 25 lakh with a critical illness component for a 35-year old non-smoker would cost around Rs 25,000-30,000 per annum. If this is allowed through an installment option, an individual will be only required to pay Rs 2,100-2,500 per month for such a policy.

The IRDAI board is meeting on June 29 and this structure may also be discussed among several other issues like preference in treaties for foreign reinsurance company branches and the proposed acquisition of majority stake in IDBI Bank by Life Insurance Corporation of India (LIC).

In life insurance

Life insurance already has a monthly, quarterly and annual premium payment option. Further, there is also a single premium payment, as also the limited premium payment, option in the life insurance space. This makes it more affordable for the policyholders since they are able to pay the premiums as per their convenience and according to their financial conditions.

Health insurance premiums are on the rise for retail customers due to the increase in claims as well as due to the double-digit medical inflation. General insurance companies are of the view that incentivising the customers by giving them the flexibility of payment will motivate more individuals to buy a health cover.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Don’t score these self-goals while handling your money

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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FIFA World Cup has raised expectations from football players like never before. The worst thing a football player can face is scoring a self-goal. It not only reduces his team’s chances of winning that match but is also a morale dampener.

Here are a few self-goals you must avoid scoring while managing your money:

Going gung-ho with one product or one asset class

Football is a team game. There are star players, but one star player cannot defeat the entire opponent team. Teamwork matters. While scoring goals is an important thing to win a match, you also need a specialist to keep your goalpost. The world of money, too, works in the similar manner. You need a mix of investments offering varying risk-reward.

Returns in the recent past influence many investors and they try to pick that asset class or that scheme which has done well. This approach generally does not help as no asset class can be the hot favourite forever. Investors end up losing money as the sentiment turns against the chosen scheme or the asset class.

Not all asset classes go up or fall together and hence it makes sense to run a diversified basket of investments. “You should not be putting all your money in one investment product or one asset class. Instead take a stock of your need and invest as per your financial goals,” says Kiran Telang, co-founder and director at Dhanayush Capital Advisors.

Ignoring inflation

This could be ultimate enemy of an investor. It is akin to ninety minutes time allotted for the football match. The time does not stop and nor does inflation.

“Inflation eats into your wealth’s purchasing power in a slow but sure manner,” points out Vinayak Savanur, founder, MoneyMintingMantra, a financial planning firm. At the inflation rate of 6 percent, the price of a shirt goes up to Rs 1,060 which was available at Rs 1,000 a year ago.

Most of the household expenses are subject to inflation and can burn a hole in your pocket. In case of healthcare and education, the rate of inflation is in excess of 10 percent. If you have to pay for your daughter’s education 10 years from now, don’t just look at today’s cost of inflation. Be prepared to pay the inflation-adjusted cost of academic courses at top notch institutes.

“While drafting an investment plan to achieve long term goals such as retirement, do not forget to account for inflation. Choose investments wisely with an intention to beat inflation,” says Savanur. If you fail to beat inflation, you will accumulate inadequate funds and you will not be able to achieve your goals. All your efforts will almost go in vain.

Saying no to insurance

Purchase of insurance is linked with the need to save income tax, in most cases. However, the limit under section 80C is kept at Rs 1.5 lakh for many years and is overcrowded with many investment options. Health insurance though enjoys dedicated tax deduction, not many find it lucrative as there is not ‘returns receivable’ on it. Personal accident insurance and home insurance covers do not have tax benefits attached to it, which makes many to skip them.

Many individuals end up either ignoring insurance or choose to buy inadequate insurance. “Insurance is not about the return on investments. One should always remember that an individual is exposed to key risks – death, illness and disability. Think of these risks in the absence of adequate insurance,” says Kiran Telang. Insurance helps you fill gaps and saves your family from hardships in case the bread-winner is absent or unable to earn a living. Buy adequate term life insurance and health insurance as early as possible.

Ignoring financial goals

Have you ever seen a football match without a goalpost?

Goalposts matter. When you do not have well defined financial goals your investment plans go nowhere. Even the best possible investments fail to deliver just because the cash flows are not aligned with your financial goals. For example, you have a financial goal of paying for your vacation overseas next year and you purchase a low-cost ULIP with that money. Here the ULIP may do well but you cannot withdraw your money at the end of one year.

Some ignore their financial goals citing that these goals are far off. Typically, retirement is something a few want to talk about. But they do forget the fact that for all other financial goals they can raise a loan, but no one gives loan to survive retired life. “It is better to review your financial situation and your financial goals. Adjust the goals for inflation and start saving as per your plan,” says Savanur.

Taking too much of debt

Borrowing is no more a taboo. Rather it has become an enabler for millennials. Inability to differentiate between wants and needs pushes many to go for loans to fund their purchases. Instant loans, personal loans and credit card funding is available at a click of button and that may lead to too many loans. Being unsecured in nature these loans come at a high rate of interest. Costly loans typically make you pay a lot of money in interest. For example, you end up paying Rs 26565 in interest over 36 months while repaying a loan of Rs 1 lakh if the interest rate stands at 16 percent.

Put straight, you end up burning a lot of your income in servicing these loans. And you find it difficult to save money, which in turn ruins the investments required to achieve your financial goals. It is better to differentiate between good loans and bad loans. Avoid taking loans for consumption purpose as far as possible.

Committing these mistakes with your money is akin to scoring a self goal in a football match. Better be disciplined with your investments and achieve your financial goals.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Indefinite nationwide truck strike begins against high diesel prices

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Truck owners and operators launched an indefinite nationwide strike on Monday against increasing diesel prices and a sharp hike of third party insurance premium.

“The indefinite strike against the soaring diesel prices and steep rise in the third party insurance premium begun this morning. About 90 lakh trucks are expected to be off the road and as of now, over 60 percent trucks were not plying on the roads across India,” the All India Confederation of Goods Vehicle Owners’ Associations President Channa Reddy told IANS.

“The government’s argument is that the fuel price increase was due to international prices. However, we think the reason for price increase is not due to international prices but high taxes levied by the governments, Centre and the states,” Reddy said.

Demanding the inclusion of diesel prices or petroleum products in the ambit Goods and Services Tax (GST), the Federation of West Bengal Truck Operators’ Association Joint Secretary Sajal Ghosh said there has been a good response in the state where about 3.5 lakh trucks would not ply on the roads.

He said the Federation is also protesting police and Motor Vehicle Department officials’ alleged excesses in the state.

Moreover, truck owners requested the Insurance Regulatory Development Authority of India to detariff the third party insurance premium as it has done in the case of comprehensive insurance policy, Reddy said.

“Since the trend of annual increase of third party insurance premium has been continuing for last 15 years even after opening of the insurance sector. To stop the increase per year, we have requested the IRDAI to detariff this. But, the authority has not responded to our demand,” Reddy added.

The strike is likely to cause a hike in prices of perishable goods items due to supply constraint.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IRDA mulls 5-year third party insurance for vehicles; what it will mean for you

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Do you know that more than 60% of the two-wheelers on roads are uninsured and close to 30% cars? In case of an unfortunate accident, the uninsured vehicle owner may not be able to compensate the victim or his family, thus it is very important for every vehicle owner to have at least third party insurance.

The Supreme Court committee on road safety is of the view that insurers should give an option of 3 years & 5 years Third party insurance for cars & two-wheelers respectively. In this backdrop, IRDAI has asked insurers to file these products & offer these options to the customers.

Animesh Das, head of product strategy, ACKO said that this is a welcome move as it will directly help to increase the insurance penetration. For a vehicle owner, it reduces the hassle of renewing the policy every year. The customer can buy policy once and get a peace of mind for 3-5 years. In addition to this, customers will get the flat rate for 3-5 years insurance and thus they will save money against the inflation. If we look at last 5 years, the Third-party insurance premium (which is decided by IRDAI) for two-wheelers has been nearly doubled & has increased to 2.5X for cars. So, opting for long-term policy will save the customer against these premium hikes as well.

An important point here is that long-term policy for 3 years for car & 5 years for two-wheelers will be offered only for third party insurance and not for the comprehensive cover (which includes vehicle damages). Currently, maximum one-year comprehensive policy for car & three years comprehensive policy for two-wheelers can be offered by insurers.

Also, one should not compare the third party insurance with the comprehensive cover. Third party insurance is for the damage caused by you to any third party whereas comprehensive insurance policy covers own damage and third-party insurance both.

Tarun Mathur, chief business officer, General Insurance, Policybazaar.com said third party insurance and comprehensive insurance policy are two different categories of motor insurance because TP insurance is mandatory by law whereas buying a comprehensive policy is purely a customer’ choice to give 360 protection to your vehicle and any damage to other vehicles. “The premium for own damage is charged to cover the cost of repair (basis depreciation) for your own vehicle in case of an accident, fire, theft etc.,” he said.

Given, third party insurance has low ticket size, usually, intermediaries were promoting comprehensive cover vs third party only. Now with 3-5 years option, Intermediary may find the third party as a lucrative option to offer and thus the availability of these products will increase for consumers which will further result in higher penetration of Insurance.

Devendra Rane, founder & chief technical officer, Coverfox.com said that long-term policies from the insurers will thus lock-in lower premium rates. At the same time, it removes the hassle of remembering the impending due dates for insurance renewals. This will also motivate vehicle owners to secure their vehicles with a proper insurance, thus increasing the penetration of insurance and thereby bringing the premium rates further down. “IRDAI has recently motivated the people to get their vehicles insured by reducing the third party premium rates for cars with engine capacity less than 1000 cc to Rs 1,850 and for two-wheelers with an engine capacity less than 75 cc to Rs 427,” he added.

Disclaimer: The views and investment tips expressed by investment experts are their own and not that of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

Source: Moneycontrol.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Government considering 100% FDI in insurance intermediaries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government is considering allowing 100% foreign direct investment (FDI) in insurance intermediaries with a view to give a boost to the sector and attracting more funds, sources said.

Intermediary services include insurance broking, third party administrators, surveyors and loss assessors.

The FDI policy, at present, allows 49% foreign investment in the insurance sector, which includes insurance intermediaries.

Sources said that there is a need to de-link the FDI cap in insurance intermediaries from insurance companies.

Representations have been made to the government that these intermediary services should be treated at par with other financial services intermediaries, where 100% foreign investment is permitted.

Further, industry experts stated that the insurance sector is being impacted due to weak distribution networks.

There is a need to strengthen the distribution network to support the sector as a whole.

Insurance penetration in the country was over 3.4% against the world average of 6.2%.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow