Now, 3-yr Insurance Covers for Two-wheelers

Two-wheeler owners will soon be able to buy a motor insurance policy for a period of three years. The Insurance Regulatory and Development Authority (Irda) has allowed insurers to launch a long-term cover. Realising the need for comprehensive coverage, the regulator has also asked insurers to file for a three-year term comprehensive policy.

The move will help insurers in cutting down their administrative costs. But experts say insurers will not be able to pass on the benefit to policyholders as premium rates are decided by the regulator. Amitabh Jain, head, motor underwriting and claims, ICICI Lombard, says, "The current guidelines issued by Irda allow companies only to issue third-party long-term twowheeler policies, where the premium to be charged is defined by Irda (tenure X current third-party premium). Thus, the customer benefits as he is not charged for future inflation."

Insurers will not be able to revise the rates during the tenure of the policy. They will also not be able to cancel the policy in any circumstances except in case of total loss. Tapan Singhel, managing director and chief executive officer, Bajaj Allianz General, says, "It's a welcome move as s two-wheelers on the road are uninsured."

Motor insurance cover has two components-own damage and third-party insurance. While own damage cover protects your vehicle against damage and theft, third-party cover protects losses to a third party. Premium rates for own damage cover were de-tariffed by the insurance regulator in 2007. Third-party premium rates are, however, still regulated by Irda.

Third-party premium rates are revised every year. For 2014-15, the rates have been increased by 20% for private cars and by 10% for two-wheelers. For private cars-with engine not exceeding 1,000 cc-rates were increased from Rs 941 last year to Rs 1,129. For cars with engine exceeding 1,000 cc but not more than 1,500 cc the rates were increased from Rs 1,110 to Rs 1,332.

LIC gets Rs 11,500 crore in I-T refunds, policy holders to benefit

Life Insurance Corporation (LIC) has received more than Rs 11,500 crore in income tax refunds and a big chunk of the amount would be passed on to policyholders, an official said.
"We received I-T refunds in two tranches aggregating to more than Rs 11,500 crore, after winning a dispute with the Income Tax (I-T) department at the Income Tax Appellate Tribunal (ITAT)," an LIC official, who wished not to be named, told PTI in Mumbai on Thursday, adding that this refund happens to be the largest which the company has received so far.
This could not be ascertained with LIC Chairman S K Roy.
A text message sent to him also remained unanswered.
In its order dated April 3, 2013, ITAT Mumbai had delivered a judgement in favour of LIC with respect to assessment years 2007-08, 2008-09 and 2009-10, the official said.
As a result of the above ITAT judgment, the LIC received a refund of Rs 4,190.19 crore for assessment years (AY) 2007-08 and 2009-10 on December 31, 2013. A refund for AY 2008-09 worth Rs 7,500 crore has been received by the LIC recently, the official said.
As per Section 26 of the LIC Act of 1956, 95 per cent of the surplus coming from I-T refunds ought to go to its policyholders, while the remaining 5 per cent has to be paid to the government in the form of dividend, after arriving at actuarial valuation at the close of the current fiscal year, the LIC official said.
LIC has paid advance income tax for the financial year 2013-14 (AY2014-15) to the tune of Rs 5,118.92 crore, as against Rs 4,323.99 crore in 2012-13 (AY2013-14).
LIC's service tax obligations for FY14 was Rs 4,022.40 crore (provisional) as against Rs 3,682.58 crore in FY13, he said.

Source : Business Today.

Glossary of Insurance Terms

Major medical policies - Health care policies that usually cover both hospital stays and physicians´ services in and out of the hospital.

Managed health care - A system that organizes physicians, hospitals, and other health care providers into networks with the goal of lowering costs while still providing appropriate medical services. Many managed care systems focus on preventive care and case management to avoid treating more costly illnesses.

Mandated benefits - Health care benefits that state or federal law says must be included in health care plans.

Mandated offerings - Health care benefits that must be offered to the employer or organization sponsoring a group policy. The sponsor is not required to include the benefits in its group plan.
Market value - The current value of your home, including the price of land.

Material misrepresentation - A significant misstatement on an application form. If a company had access to the correct information at the time of application, the company might not have agreed to accept the application.

Glossary of Insurance Terms

Laddering - Purchasing bond investments that mature at different time intervals. 

Lapse Ratio - The ratio of the number of life insurance policies that lapsed within a given period to the number in force at the beginning of that period.

Least Expensive Alternative Treatment - The amount an insurance company will pay based on its determination of cost for a particular procedure. 

Leverage or Capitalization - Measures the exposure of a company's surplus to various operating and financial practices. A highly leveraged, or poorly capitalized, company can show a high return on surplus, but might be exposed to a high risk of instability.

Liability - Broadly, any legally enforceable obligation. The term is most commonly used in a pecuniary sense. 

Liability Insurance - Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.

Glossary of Insurance Terms

Key-Persons Insurance - a policy purchased by, for the benefit of, a business insuring the life or lives of personnel integral to the business operations.

Kidnap/Ransom Insurance - coverage for ransom or extortion costs and related expenses.