Mediclaim premiums may rise in 2011

Mediclaim premiums may rise in २०११

New Delhi: The insurance industry will remember 2010 as an eventful year in which insurance regulator Irda came out on top in a turf war with market watchdog Sebi over the regulation of Unit-Linked Insurance Products (Ulips), with the end result of such schemes becoming investor-friendly. Sweeping regulatory changes with regard to Ulips have already set the tone for the New Year.

“2011 will be a year of transition and adaptation for the life insurance industry. After having witnessed the changes in the financial market, consumer sentiments and regulatory changes, going ahead life insurance will need to focus on and be sold as a long-term contractual savings and protection tool,” Max New York Life Insurance managing director Rajesh Sud said.

As far as general insurance is concerned, mediclaim policy premiums witnessed an increase as insurers tried to cut down their losses due to excessive claims.

What is more, four public sector general insurance firms—Oriental Insurance,.

Thereafter, the Securities and Insurance Laws (Amendment) and Validation Bill, 2010, was passed by Parliament to address the issues of jurisdiction between the financial sector watchdogs. After the promulgation of the Ordinance, Irda tightened the norms for these schemes by increasing the lock-in period and raising the risk cover to make a significant distinction between Ulips and mutual fund products.

At the same time, dealer commission rates were reduced and disclosure norms tightened to ensure greater transparency of Ulip schemes.

Echoing a similar view, Bharti AXA Life chief marketing and operations officer (CMOO) Mark Meehan said, “It’s short-term pain, but long-term gain for the insurers.” The industry has been quick to adjust to the changed landscape and improve operational processes and the quality of their distribution chain, said Aviva India managing director T R Ramachandran.