Prudent asset management strategies aligned to regulations adopted by the industry have provided consumers healthy returns over long-term
Rule 17D of Insurance Act 1938, there is a capping on expenses of management.
Rule 17D of Insurance Act 1938, there is a capping on expenses of management.
Exemption is granted to companies in first 5 years of operation.
Maximum Commission payable to agents under various product heads is prescribed in the Insurance Act.
Percent Commission is lower on high premium policy and vice-versa.
Companies are statutorily required to do rural business from there first year of operation.
Companies are statutorily required to do rural business from there first year of operation.
Companies which are in operation for 6 years or more have to mandatorily sell 18% of new policies in rural areas.
Companies are supposed to cover 25,000 lives in agriculture and unorganized sector.
2.8 crs rural policies were sold by companies in last two years.
(1.26 Crore policies in 2007-08 and 1.54 Crore policies in 2008-09)
Companies are to open branches in non-city areas to do some priority sector lending.
No such obligations for Mutual Funds which operate only in 16 cities.
70% of the total 11,720 branches of insurance companies are in semi-urban or rural areas.
As of now there is no separate provision for long term savings instrument including Life Insurance since the current provisions provides for deduction for investments in both short term and long term savings.
Currently short term savings also includes the home loan repayments along with plethora of other savings instruments life mutual funds , bank deposits etc.
To address the long term savings , investment in long term products can be incentivised through a separate deduction for such investments.
Disparity in service tax for similar financial products.
Disparity in service tax for similar financial products.
Life Insurance companies are required to maintain high capital solvency requirements.
Life Insurance companies are also required to adhere to the the social obligation norms of IRDA to open offices in rural and cater to the rural market which increases the costs of the companies to a greater level.
