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GAAR amendments finalised, says FM
biz
talk
Entry fee refund to telecom operators: DoT again seeks legal opinion
Google’s Android is eating Apple’s lunch
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personal
finance
Think before investing in insurance plans
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GAAR amendments finalised, says FM
New Delhi, November 18
"That is under preparation and I think the work is almost complete. The drafting work is complete. So, GAAR is under control. I’ve taken the decisions, subject to the PM’s approval and then the cabinet," he told PTI in an interview. “Hopefully, the decision will be made public in the next 7 to ten days”, he added without giving any details. Chapter 10A of the Income Tax Act deals with taxation of investments. GAAR, which was proposed in 2012-13 budget with a view to preventing tax evasion, evoked sharp reactions from foreign as well as domestic investors who feared that unbridled powers to taxmen would result in harassment of investors. The government later appointed a committee headed by tax expert Parthasarthi Shome to look into their concerns. During the interview Chidambaram spoke on a variety of subjects including his optimism on meeting disinvestment and spectrum sales target, confidence on pushing through with reforms measures and the relationship with RBI which he said was not antagonistic. On the issue relating to retrospective tax amendment on which the Shome Committee had submitted its report, he said: "The Central Board of Direct Taxes has given its views. I have taken decisions at my level. The drafting is going on. Again it will go to the PMO and then to the cabinet." Referring to the Direct Taxes Code ( DTC), a bigger matter, he said, "We have now started work. This morning I spent two hours on that. Earlier I had spent several hours. We are looking at it. We have tabulated it...will take final decision." Chidambaram said that government was keen to get the investment engine going and measures were being taken by the government to create a "better climate". "Today there is reluctance to invest because it (industry) perceives a number of hurdles to investment. It also doesn't see the economic situation very propitious or conducive for investment. "I think some steps we took in September have broken this wave of fear but some part of it is still ther:, he added. — PTI
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biz
talk Headquartered in Mumbai, IndiaFirst, with a share capital of Rs. 475 crore, is one of the country's youngest life insurance firms and is promoted by two of India's largest state-owned banks — Bank of Baroda and Andhra Bank, along with Britain’s leading risk, wealth and investment company Legal & General. Bank of Baroda holds a 44 per cent stake in IndiaFirst, while Andhra Bank and Legal & General hold 30 per cent and 26 per cent stake, respectively. IndiaFirst managing director & CEO P. Nandagopal talks to Girja Shankar Kaura about the company’s future plans. Q. Tell us about the growth of the company and factors that helped you achieve this growth. A. We achieved a substantial growth of over 40 per cent year-on-year by garnering over Rs. 1,000 crore premium during fiscal 2011-12. We have also covered 1.6 million lives till 31st March, 2012. We believe staying true to our promise of providing fair value to all stakeholders —customers, distributors, employees and shareholders — has been the reason for our success so far. We have launched various initiatives in our quest to always place our customers ‘First’ in everything we do — right from developing simple, easy to understand products that are fairly priced, to simplifying insurance and making it transparent through our latest offering the MagicBoard. Also, corporate business as a segment showed tremendous growth for us in the last financial year. We have approximately Rs 2,619 crore in total assets under management (AUM) at the close of March 31, 2012. Q. What will be your product focus for 2013?
A. We already have a comprehensive product suite that caters to all segments — protection, savings, investments & health. We also have a wide range of group insurance products ranging from credit life, term and employee liability (gratuity and leave encashment) plans. However, we will look to strengthen our presence across health, pension and micro insurance. Q. What is your current market share? A. We have roughly a three per cent market share amongst the private life insurance companies (as of 31st march, 2012). However, we would not want to benchmark ourselves on the basis of mere market share. It is our aim to be one of the most cost efficient companies in the industry. While it is our aim to be amongst the top quartile companies within 5 years, our primary objective is to ensure sustained value for all stakeholders through simple easy to understand products that are fairly priced and efficiently serviced. Q. What is MagicBoard? A. MagicBoard is our latest initiative that will help us take customer delight to the next level. It offers instant insurance at the customer’s door step with end-to-end fulfillment. It completely moves the manual sales process to an integrated, IT- enabled platform across the country. This is a one-of-its-kind initiative in the Indian Bancassurance domain. Through MagicBoard we would like to pave the way for a brave new world of insurance that is simple, transparent, truthful and efficient to benefit all the stakeholders — customer, distributor, shareholder and employee. MagicBoard is our sincere effort to achieve a game change in the life insurance industry. Q. Who are the main beneficiaries? A. MagicBoard benefits all — the customer, the sales staff and the insurance company. It provides full information, consistency of communications, instant service and sale to the customer; better productivity, total customer connect, real time organizational support to the field sales force; cost efficiency, real time business intelligence for field support and control on sales conduct to the insurance company through its first module. Magic Board integrates all customer processes with distributor, employee and corporate into a seamless single page view. It’s a force multiplier in sales force productivity, efficiency, resource optimization and customer satisfaction Q. What are the key benefits of the ‘Customer’ module that has been launched? A. The customer module helps optimize leads, recommends the right product based on the customer needs, details out the product key features and risk factors honestly through prerecorded product audiovisuals, eliminates cumbersome procedures — instant upload of documents, collection of premiums and policy printing, and provides business intelligence and MIS (management information systems) reports on a real time basis. The overall user interface has been developed keeping simplification and ease of use in mind. Unnecessary steps/process have been eliminated to provide an intuitive and seamless experience for the end user. A salesperson can now complete a sale on the spot (with or without access to the internet) within 15 minutes. The MagicBoard platform also allows the salesperson to cater to customer requests, complaints and claims instantly through live video calls, instant access to key personnel in the corporate office, etc.
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Entry fee refund to telecom operators: DoT again seeks legal opinion
New Delhi, November 18 According to sources, DoT has asked for the Attorney General's opinion on "whether entry fee...paid by licencees whose licences have been ordered to be quashed by the Supreme Court needs to be refunded/released/adjusted to all the licencees, as requested by them, whether participating in auction or not?" The Supreme Court had cancelled 122 telecom licences belonging to eight telecom operators in the 2G scam in February this year. Of the eight companies whose licences were cancelled, only three companies — Idea Cellular, Videocon and Telenor (majority stakeholder in Uninor) — participated and won spectrum in the auction held last week. DoT in its communication to the law ministry has said the government had received legal notices from various companies that include Etisalat DB, Sistema Shyam, ByCell, S Tel, Loop Telecom among others, seeking protection of their investment. Among these firms, it was only ByCell whose licences were revoked by the government due to security reasons. The Attorney General in August 2012 had said the need to refund licence fee paid by operators affected by the SC judgement "does arise at this stage". — PTI |
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Google’s Android is eating Apple’s lunch
San Francisco, November 18
"Android has been one of the primary growth engines of the smartphone market since it was launched in 2008," said IDC's mobile phones research manager Ramon Llamas. "In every year since then, Android has effectively outpaced the market and taken market share from the competition." In tablets, Apple's market share has fallen to just over 50 percent from 65 percent in the second quarter as Android devices gain ground, according to IDC figures. "Having a lot of people building a lot of things covering a lot of price points with multiple brands in multiple places makes a big difference," said NPD Group analyst Stephen Baker. "Variety is strength when it comes to moving units." Android smartphones shipments surged to 136 million, topping those in the same three-month period last year by slightly more than 90 percent, IDC reported. Samsung's Galaxy S3 overtook Apple's iPhone 4S in the third quarter to give the South Korean firm the world's best-selling smartphone model for the first time ever, according to research firm Strategy Analytics. "The pace of innovation in Android is faster than Apple," said Gartner vice president of mobile computing Ken Dulaney. "They are just trying harder; Apple is way behind in that area." Android is benefiting from being an "open-source" platform that gadget makers use free of charge and improve as they deem fit, providing Google with insights along the way. Apple tightly controls its products from the software to the hardware and even the online shop for music, books, games or other content. "What you get with Android is this incredible feedback loop with developers, equipment makers, customers, and designers," Dulaney said. "At Apple, as long as they have a great vision internally it is fine but they don't have the feedback Android does." Having thousands of different Android devices vying for consumers' cash is a strength when it comes to market share but puts hardware makers into a fiercely competitive arena, Baker noted. "Other than Samsung, I don't know if other Android guys are making money," the analyst said. Google gives Android away free, but the platform is crafted to make it easy for people to use the California Internet titan's money-making services such as search and maps, and get content at its online Google Play shop. — AFP
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Steps to ensure a smooth insurance claim
Suresh Agarwal
However, the foundation for a hassle free claim experience is laid not at the time of claim, but, at the time of policy purchase itself. It is advisable to look at claim settlement ratios of insurance companies whose products you are considering. A high claim settlement ratio usually indicates better process efficiencies and careful due diligence by the insurer, and, for the claimants it means lesser possibility of claim rejection and disappointment. To ensure that your claim experience is hassle free rain check on the following:
Nondisclosure, partial disclosure and/or wrongful disclosures of significant and material facts are important reasons for claims rejection. Where such information comes to the knowledge of the insurer, the claim gets rejected as per the contractual terms and conditions. When a claim is rejected on sound grounds, there is often little room for appeal. The three most common reasons why claims are repudiated are:
Proactive steps taken by insurers
In an insurer discovers contradicting facts after the issuance of a policy contract, it normally communicates and re-engages with the customer besides re-underwriting the case and arriving at an appropriate decision in the light of fresh facts. On rare occasions, if the nondisclosure is very significant and the risk cannot be accepted, the policy contract could also get cancelled. In the ultimate analysis, these proactive steps help the insured's family avoid problems at the time of filing claims. Further, insurance companies also train their sales forces with live case studies to sensitize them on the importance of swift and timely claim settlements. It must be understood that insurance is a contract based on the principle of uberimae fides or "utmost good faith" and underwriting decisions are based on the faith that the disclosures made by the customer are fully and completely true. Selective disclosures or nondisclosure affect underwriting decisions. It not only undermines the very basis of the insurance contract but also alters the risks the insurer assumes on its books. There are occasions when the nominees appeal it is not their fault that facts were not shared or misstated, but unfortunately the insurer may not be able to help much at this stage. It is important that the proposer, who is responsible to provide correct facts in the first place, bear these important aspects in mind to ensure his or her relatives have a swift claim experience. The author is executive VP and head of distribution & strategic initiatives at Kotak Mahindra Old Mutual Life Insurance. The views expressed in this article are his own |
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Think before investing in insurance plans
Investment and insurance are two opposite sides of the same coin. If you try to club both insurance and investment, surely you will neither get adequate life insurance cover nor will your investment give you good returns as compared to other investment avenues available in the same asset class. It is not prudent to buy any financial product without understanding the features of the product and cost structure attached to it. If you are planning to invest your surplus money for future goals then compare the returns you may get from a particular instrument vis-à-vis other asset classes. But if you want to insure yourself then compare the features of the product (risk covered exclusions and premium payable to insure) across different life insurance companies. There is no insurance cum investment product available in India that cannot be beaten by two separate products and therefore it is always advisable to separate insurance and investment for better results. Everybody including the IRDA chief knows that misselling is rampant in insurance products compared to other financial products as commission payable to the agents are higher. Another important thing is that you will never be able to cover yourself adequately if you decide to buy insurance cum investment product, as the premium will be surely higher than your yearly surplus available for investment. Let us understand all the three variants of life insurance products available in the market and compare them to other financial products available in the same risk category. Traditional plans Endowment, money back and whole life plan come under this category in which investment decisions remain with the insurer. According to the guidelines under the Insurance Act, these plans have to invest minimum 85% in debt instruments like government and corporate bonds and only can invest up to 15% in equity. The combination is similar to hybrid debt oriented conservative plans of mutual fund popularly known as MIP funds. During the last ten years conservative MIP funds have given returns of around 10% p.a. On the other hand the average LIC bonus during the past decade was Rs 60 per Rs 1,000, meaning a 6% return per annum. The bonus of private life insurers is much lower than LIC. The returns on MIP funds are taxable but the impact gets reduced due to the benefit of indexation available for tax purposes. Considering 0.5% cost of insurance cover and 0.5% tax liability still you get 3% extra return if you invest in MIP plans which have the same asset allocation of debt and equity. Even if you invest the balance in PPF account after paying premium for term plan insurance you will get better return as compared to these insurance plans. The rate of interest for year 2012-13 is 8.8% in PPF. Unit linked insurance plans popularly known as ULIPs are market related plans in which investment risk is borne by the policyholder. IRDA guidelines allow 3% charge for ULIP product of above 10 year term. Recently mutual fund expense ratio has gone up to 2.70% to 3% and that is almost similar to ULIPs. This does not mean ULIP has become better option. One need to compare the performance of funds in ULIP plans with the nifty index and performing mutual fund scheme. You will find that the performance of the most of the ULIP funds is just around or below nifty index but much less than performing mutual fund schemes. Again if you separate your insurance needs and invest in diversified equity scheme of mutual fund it will give much better result. Come January 1, 2013 and you will also get the option of direct plans where your charges in mutual fund scheme will come to around 1.50 to 1.75%. You have one more added advantage in a MF scheme: if your scheme does not perform well compared to its benchmark or its peers, you can immediately switch to other fund whereas in insurance surrendering will cost you as there are higher charges in the initial years which will reduce your available fund value. Variable insurance plans This is a new version invented in the recent past by insurers wherein features of traditional plans and unit linked plans are merged. Again there is no transparency in the plans like ULIPs. Separating insurance and investment always benefits and it's a proven fact. Term insurance is the simplest and oldest form of life insurance to cover one's life and the easiest to understand. You do not have to calculate the charges and returns in this plan, as you know from the day one that premium paid by you is expenditure and nothing is receivable back. Term insurance is the least expensive plan to purchase the death benefit. Now online plans are available at very low cost. One should buy life cover equal to twelve times of annual income preferably through online route and invest surplus money in the other asset class on the basis of desired asset allocation depending on individual goals. The author is head of financial planning at ApnaPaisa.com, an online investment portal. The views expressed in this article are his own
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"I have finalized the amendments to the Chapter 10A of the Income Tax Act. Now it will go to the Prime Minister’s Office (PMO) and then we should be ready with the amendments and then the GAAR rules will reflect the amended Chapter 10A.
sales staff and the insurance company. It provides full information, consistency of communications, instant service and sale to the customer; better productivity, total customer connect, real time organizational support to the field sales force; cost efficiency, real time business intelligence for field support and control on sales conduct to the insurance company through its first module.— 
The Android operating system powered nearly three out of four smartphones shipped worldwide in the recently ended quarter as the mobile platform dominated the market, according to industry trackers at IDC.
A hassle free claim experience is central to the insurance promise. Claims however arise only in case the conditions for it as outlined in the insurance contract such as death or permanent disability occurs. Either way, the environment in which a claim is made is usually one of grief and sadness. While there is no way to compensate such loss, a claim at least cushions the financial fallout on the family arising from the death or disability of the life insured. This acquires greater importance in those cases where the life insured was the sole breadwinner. The importance of swift, easy and hassle free claim settlement experience cannot be understated in such circumstances.
