newsletter- 30 december 2011 - 5 january 2012

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News CategoriesInsurance R egulation Insurance made child's play, with comic books

ALM norms for insurance cos

R e-Insurance2011 costliest year for insurers with over 820 loss relevant events

G lobal NewsC hina: Insurance intermediary launches product comparison website

Insurance R egulation Top

N ews Insurance made child's play, with comic books

N ewspaper The Hindu Business Line

Source http://www.thehindubusinessline.com/industry-and-

economy/banking/article2758559.ece

Hyderabad, Dec. 29:

The country's insurance regulator will use the power of comic books to drive home the basic concepts, needs and importanceof insurance in one's life, starting right from the school level.

The Insurance Regulatory and Development Authority has readied comic books and hand-books for high school students.They will be distributed in select schools and later scaled up.

The books will contain attractive stories which will try to weave the basic concepts of insurance, products, both traditionaland unit-linked, the need for insurance and how to address problems and what mechanisms to choose.

³I believe that children should be made aware of the basics of insurance so that they can be financially-informed adults

later,´ Mr J. Hari Narayan, Chairman, IRDA told Business Line.

In a new approach, the IRDA plans to catch them young to promote insurance. In the last few years it has been making

efforts to simplify procedures, policy documents, and so on to help customers. There is more. ³We have asked the Central

Board of Secondary Education and State boards of intermediate education to introduce insurance in curriculum,´ Mr HariNarayan said.

Efforts are also on to launch an educational course in insurance, he added. This can also help youth from the rural areas totake up insurance agencies.

The objectives of the initiative are simple. As insurance is a complex subject with much scope for mis-selling, catchingeducating the young in insurance concepts augurs well.

Further, given the huge potential for growth of the insurance sector in India, a proper awareness would also help theindustry.

The other financial regulators such as the Securities and Exchange Board of India and Reserve Bank of India have also been

treading a similar path.

While SEBI has been in discussion with Central Board of Secondary Education, the RBI had released simple information

booklets.

N ews ALM norms for insurance cos

N ewspaper The Hindu

Source http://www.thehindu.com/business/Industry/article2775018.ece

The Insurance Regulatory and Development Authority (IRDA) has announced a broadly-defined uniform framework for

reporting asset liability management activities adopted by life and non-life insurance companies.

The new framework will come into force from April this year.

Insurance Institute of IndiaG Block, Plot No. C-46, Bandra Kurla Complex, Bandra (East), Mumbai 400051.

N ewsletter

30 th

December 2011- 05th

January 2012



The IRDA guidelines require the ALM (asset liability management) policy to be approved by the board of the insurer. Such

board-approved policy should be submitted to the IRDA within 90 days. While approving the ALM policy, the board should,according to IRDA, take into account the asset-liability relationships, the insurer's overall risk tolerance, risk and return

needs, solvency positions and liquidity requirements.

The guidelines also make it mandatory for the board to frequently review the ALM policy of the insurer. Any change in the

policy must be reported to the regulator.

Under the uniform framework, insurers have to put in place an effective mechanism to monitor and manage their asset-

liability positions. The objective is to ensure that their investment activities and assets positions are in sync with their

liabilities, risk profiles and solvency positions.

The insurers are also required to develop and implement controls and reporting systems for the ALM policies that are

appropriate for their businesses and to the risk to which they are exposed.

The IRDA said ³stress testing helps insurers ascertain the potential level of vulnerability to different scenarios to manage

their risks and maintain enough financial resources to manage them.'' The guidelines now require the insurers to conduct

stress test and provide IRDA the details along with the FCR (financial condition report).

R e-Insurance Top

N ews 2011 costliest year for insurers with over 820 loss relevant events

N ewspaper The Economic Times

Source http://economictimes.indiatimes.com/personal-finance/insurance/insurance-

news/2011-costliest-year-for-insurers-with-over-820-loss-relevant-

events/articleshow/11363910.cms MUMBAI: With over 820 loss relevant events, 2011 became the costliest year for insurance industry in terms of naturalcatastrophe losses and in line with the average of the last ten years.

According to a report by reinsurance giant Munich Re, 90% of the recorded natural catastrophes were weather-relatedhowever, nearly two-thirds of economic losses and about half the insured losses stemmed from geophysical events likeearthquake. On average over the last three decades, geophysical events accounted for just below 10% of insured losses. Thedistribution of regional losses in 2011 was also unusual. Around 70% of economic losses in 2011 occurred in Asia.

While global economic losses were at about $ 380 billion, insured losses at $ 105 billion. The report said that earthquakes in

Japan in March and New Zealand in February alone caused almost two-thirds of the overall economic losses.

"It is the insurance industry's task to learn from such events in order to protect mankind better from these natural perils,"said Munich Re board member Torsten Jeworrek.

Though India has not seen many natcat events, premium on property covers are expected to go up, when they come forrenewals in April. During the January 2011 renewals, reinsurers have raised the rates by 10-15%.

G lobal News Top

N ews C hina: Insurance intermediary launches product comparison website

N ewspaper AIR- eDaily Asia Insurance Review

Source http://www.asiainsurancereview.com/pages/e-weekly.asp?country=10#15156

CNinsure, a leading independent insurance intermediary company in China, has launched its insurance comparison website, www.baoxian.com, under the name of Baowang on 1 January.

The website allows customers to compare a wide range of insurance products from various insurance carriers across price,services and policy benefits and facilitates full-process transactions from quote comparison and application to onlinepayment. As of 31 December, CNinsure had established e-commerce partnerships with over 16 insurance companies such asChina Pacific Property Insurance, Sunshine Property and Casualty Insurance, Tianping Auto Insurance, China ContinentProperty and Casualty Insurance, Chartis, and Generali China Insurance.

Over 100 of insurance products, including auto insurance, health insurance, accident insurance, travel insurance andhomeowner insurance, will first be placed on the website. Hundreds of additional insurance products are expected to begradually introduced to the website within the next few quarters.

Baowang is another important milestone in CNinsure's plan to develop e-commerce business since the acquisition of

Shenzhen InsCom E-commerce last year. The company has since restructured the insurance portal website run by ShenzhenInsCom into a professional third-party insurance transaction and services platform.



Mr Wang Chunlin, CNinsure's CEO, comments: "The China Insurance Regulatory Commission has recently promulgated theProvisional Regulations on the Internet Insurance Business of Insurance Agencies and Brokerages which sets forth the legalframework for insurance intermediaries to operate e-commerce insurance business in China. Meanwhile, with the popularity of the internet in China, the development of a one-stop integrated e-commerce platform is becoming an inevitable trend. With a favorable regulatory environment and being on the leading edge of the trend, we are optimistic about thedevelopment of our e-commerce insurance business."

Disclaimer:

µNewsletter¶ is for Private Circulation only intended to bring weekly updates of insurance related information published in various media like newspapers, magazines, e- journals etc. to the attention of Members of Insurance Institute of India registered for its various examinations. Sources of all Cited Information (CI) are duly acknowledged

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newsletter- 30 december 2011 - 5 january 2012

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