The government may allow foreign insurers to increase stake in Indian JVs (Joint Ventures) via the automatic route from current 26 percent to 49 percent, in the upcoming budget session of the parliament, said reports.

Currently, FDI (foreign direct investment) via automatic route is limited to 26 percent post which FIPB’ s (Foreign Investment Promotion Board’ s) approval is required.   It was speculated that the move could attract FDI worth $1 billion to $3 billion to the sector and make India an attractive destination for global insurance stars such as Llyod’ s and Berkshire Hathway.

Increased foreign participation and investments is good for the sector as insurance penetration in India stands at a meager 3.9 percent, which is amongst the lowest in the world.

The year 2015 saw many foreign insurers increase their stake in domestic JVs after the parliament increased FDI ceiling in domestic insurance companies from 26 percent to 49 percent.


Source – Insurance Club

Date – 25th February , 2016.

A quick guide to using personality ‘tests’

One of the toughest decisions an HR professional has to make is who to hire. You probably have at least one story of a candidate who aced the interview and had great credentials, but bombed in whatever job he or she was hired to perform. Hiring decisions can be stressful not just from an economics and resources standpoint, but also because, honestly, we don’t want to look bad to our peers by having advocated for the wrong applicant. Survey says heavy workloads, high stress levels dominate workplaces

  • Public health concerns that stress is becoming a workplace epidemic have been confirmed by an employee research survey by Insightlink Communications, which finds that the frequency of anxiety, exhaustion, burnout, and fear of losing their jobs is reported with increasing frequency. Employee confidence levels remain high at the end of 2015, says Randstad
  • According to the 2015, Q4 Randstad US Employee Confidence Index (ECI), more than one-third of workers (34%) believe more jobs are available and nearly six in 10 (55%) indicate they are confident in their ability to find a new job. Minnesota: Is hiring a bilingual speaker over a unilingual speaker discriminatory?

The U.S. District Court for the District of Minnesota recently heard a failure-to-hire claim, in which the employer hired a bilingual dental hygienist rather than a unilingual applicant. Was this discriminatory? In an all-out blitz, the U.S. Department of Labor (DOL) has undertaken a number of efforts to encourage states and private employers to support paid leave.

Source: SHRM

Date: 22nd Februray,2016

‘’Job-application fraud at a five-year high’’

Every .year, around 1,200 potential employees at Birlasoft (India) Ltd undergo a massive exercise in background screening, or claims made in their applications. And this exercise, says Siby Joseph, general manager (human resources), has helped the Noida-based information technology (IT) services company maintain “credibility in front of our sensitive clients”.

“As an IT services company with clients in sectors like banking, insurance and manufacturing sectors, our potential employees need to be extra cautious, trustworthy to not hurt the brand image of the company as well as clients. Between job offers and joining date, we run eight key checks on candidates,” said Joseph.


“And if he or she fails during background screening, we say ‘sorry’. Such checks are now part of the job offer agreements,” said the HR manager.


Birlasoft is among a number of companies that have become increasingly particular about the need to check their employees’ background. They have good reason to be wary—a fresh study finds that 2015 was the worst year for frauds by job seekers in the last five years.


Discrepancies, including forgeries in education and employment credentials in job applications in India, fell slightly to 11.4% in the last quarter of the 2015 calendar year in comparison to the previous three quarters.


But while in 2011, 2012 and 2013, overall job application-related frauds remained at 10%, they rose to 10.5% in 2014 and 11.6% in 2015, according to the report by global background screening firm First Advantage.


This means that of all the applicants First Advantage screened on behalf of companies in 2015, at least 11.6% reported some kind of forgery related to employment, address, education or some other personal credentials. The company screened some 2.8 million candidates in 2015, or an average of 700,000 every quarter.


The report said IT and banking, financial services and insurance (BFSI) were the key sectors where job seekers were most liberal in window-dress


Source:- (Mumbai)

Date:-    23rd   February,2016





‘’This Budget, incentivize domestic capital in the insurance sector ‘’

With the Finance Minister’s impending Union Budget speech coming up, we in the start-up world, specifically in the insurance and fintech space have the following wish list from Budget 2016:

1) Incentivize domestic capital: The budget should consider ways to incentivize domestic capital, which is typically risk-averse, in the insurance sector and specifically fintech spaces. The Budget should also consider relaxation in structures, which make private secondary transactions more liquid from a tax perspective.

2) Encourage Small and Medium Businesses (SMBs) to cover employees under group health and accident insurance schemes: If service tax is removed on these plans, and tax deductions given on this class of employee expenditure, it would play a significant role in securing the most vulnerable. Case in point, in the recent Chennai floods, more than 57,000 houses were damaged – most of them reported to be in pincodes that housed  working class people. Data says only 10% of them were covered.

3) Incentives for people below a threshold economic level: Consideration of tax breaks or tax incentives on office property insurance and home insurance for the people below a threshold economic level, who work at these places.

4) Make insurance premiums more affordable for masses by waiving off the Service Tax: In the last few years, the government has taken several good measures to help penetration of insurance in our economy and that has been well received. However, there is still a great need to make insurance affordable for all segments of society. To this effect, the Budget should make Health Insurance, Accidental Disability Insurance premiums more affordable for the masses by waiving off the Service Tax of 14.5%.

5) Focus on promoting accident disability insurance: The Prime Minister has stressed on the importance of an accidental disability cover as part of Social Security through various schemes like Pradhan Mantri Suraksha Bima Yojana and Jan Dhan Yojana. To promote Accident Disability Insurance the expenditure incurred to cover this insurance should be included in the 80D or 80C deduction as well.

6) Finance healthcare expenditure of the lower economic and working class: To ensure Healthcare is accessible, affordable, the Government should, apart from introducing healthcare regulations, ensure that healthcare expenditure of the lower economic and working class is financed through Government funded/facilitated health insurance programs.

In an ideal world we would see fulfillment of all six wishes. However, it will be a big boost, if the government comes through on even three or four of the above.

Source:- Economic Times (Mumbai)

Date:-    22nd  February,2016




‘’Budget 2016 may unveil health insurance scheme for senior citizens ‘’

Government is working on a cashless health insurance scheme for senior citizens which may be announced in the upcoming Union Budget 2016-17.

Around Rs 10,000 crore – lying unclaimed in banks and insurance companies, EPFO and small savings schemes — would be utilised for providing the health insurance cover to the elderly, sources said.

Senior citizens are often dependent on their children or extended families for healthcare, they said, adding that the proposed scheme will help in meeting secondary and tertiary health care needs.

The quantum of insurance cover would be more than Rs 50,000 for person over 60 years.

Finance Minister Arun Jaitley will present the central budget for the next financial year on February 29.

The proposed scheme will be administered by the Department of Financial Services under the Finance Ministry.

The government proposes to link this scheme to bank accounts of beneficiaries to directly transfer the subsidised amount to the accounts. As per the proposal, the government would subsidise the premium for those below poverty line by up to 90 per cent through cash transfers to their bank accounts.

It’s not that the government will forfeit these unclaimed funds, sources said, adding that if claimants come forward they will be paid because the fund would be revolving in nature, sources said


Health insurance scheme for senior citizen would be a logical extension of the ongoing low premium life insurance (Pradhan Mantri Jeevan Jyoti Bima Yojana), general insurance (Pradhan Mantri Suraksha Bima Yojana) and pension plan (Atal Pension Yojana) of the government, sources said.

The Pradhan Mantri Jeevan Jyoti Bima Yojana offers a renewable one-year life cover of Rs 2 lakh to all savings bank account holders in the age group of 18-50 years, covering death due to any reason, for a premium of Rs 330 per annum.

The Pradhan Mantri Suraksha Bima Yojana offers a renewable one-year accidental death-cum-disability cover of Rs 2 lakh for partial/permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of Rs 12 per annum per subscriber.

The Atal Pension Yojana focuses on the unorganised sector and provide subscribers a fixed minimum pension of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000 or Rs 5,000 per month, starting at the age of 60 years, depending on the contribution option exercised on entering at an age between 18 and 40 years.


Source : Economic Times, Mumbai.

Date    : February, 21 2016

NRN-backed Coverfox Looks for Funds

NR Narayana Murthy funded online insurance portal Coverfox is in discussions with existing as well as new investors for further infusion of funds to back the company’s expansion plans.

The portal, which was launched two years ago and has been operational since the past 18 months, competes with behemoths like Azim Premji-funded PolicyBazaar. Varun Dua, CEO of Coverfox told ET the firm which has sold 100,000 policies so far, is in the process of scaling up.

In April last year, Glitterbug Technologies -the holding firm for Coverfox -raised $12 million in its series-B funding from growth investment arm of US-based Accel Partners besides existing backers SAIF Partners and Accel India.

The new round came six months after the Mumbai-based startup raised its initial funding round of around $2 million from SAIF Partners and Accel India, who also participated in the new round.

In addition to this, Murthy’s private investment firm Catamaran Ventures also made investment of an undisclosed sum in the company.


“We are currently reasonably well-funded, but will start the fresh fundraise process in the next few months,“ said Dua. A MICA alumnus who has previously worked in marketing positions at Tata AIG Life Insurance and Franklin Templeton Investments, Dua co-founded the start-up with IIT Bombay graduate Devendra Rane.

He said unlike many new age start-ups, the company is in a category where the revenue models are strong. Coverfox, which operates on a broker license from the Insurance Regulatory Authority of India, derives a brokerage from each policy sold through its portal. “We are in the business of paper products, so we don’t have to invest in logistics, warehouses, feet on the street etc,“ said Dua.


But the company will require funds as it scales up its operations. “We are talking to both existing investors and have started conversations with some global funds,“ he added.

According to estimates, just a little over 4% of the country’s population is covered by insurance and just about 2% of that market is online. The challenge for the company is not just to create awareness about its own brand but for the overall online industry as well.

Dua says that the credit goes to its large rival PolicyBazaar for creating the market. However, what sets Coverfox apart from the existing players in the industry is its tech-based approach.

“There is a lot of investor interest in financial tech,“ said Dua.


Source: The Economic Times (Bangalore)

Date: 22nd February, 2016.

Why Pay Employees to Exercise When You Can Threaten Them?

When it comes to getting people to participate in workplace weight loss programs, financial rewards may not be much of an incentive. Penalties, on the other hand, work great.

For three months, 281 employees at the University of Pennsylvania participated in a step challenge. The goal was to walk at least 7,000 steps a day. Researchers used different incentives: One group got $1.40 for each day they met the goal, while another got $42 up front each month, and lost $1.40 for each day they didn’t finish. Also participating in the study, published Monday in the Annals of Internal Medicine, was a group that got to enter a lottery to win $1.40 each time the goal was reached, and a control group that got no money at all.

Rewarding people with money, it turns out, didn’t inspire more people to achieve their goal. About 30 percent of people who got no money performed their 7,000 steps, compared with about 35 percent of those with a potential reward, a statistically insignificant difference, according to lead researcher Dr. Mitesh S. Patel.

The people who faced a penalty for failure, however, reached their goal 55 percent of the time.

“It was surprising how dramatically effective loss aversion was,” said Patel, an assistant professor of medicine. Although the payoff for participants (they tracked their steps with cell phones) wasn’t very high, increasing the cash doesn’t work, either. Another study last year by Patel found a $550 health insurance premium incentive didn’t promote weight loss in participants.

Financial incentives have been a popular way to get workers to participate in wellness programs. About 40 percent of companies offer rewards for completing certain health and wellness programs, according to the Society of Human Resource Management.

Employers tend to take one of two routes: the carrot or the stick. Some dangle financial benefits, which come in the form of discounts on health insurance premiums. The thinking is that giving employees a bonus will improve results or at least get them to participate. Increasingly, though, employers are using a tougher approach, taking away insurance coverage or otherwise taxing those who don’t participate. Threatening employees with a loss, the thinking goes, is a better way to motivate.

“I see more and more companies switching over to penalizing as opposed to the incentives and rewards,” said Jeff Luttrell, who works with SHRM.

Not all incentives are created equal, Patel’s new study suggests. “The design of the incentive is critical to its success,” he says. “It has to do with how our brains are wired. We know from a lot of research that people are irrational, but they’re predictably irrational. They tend to be more motivated by losses than gains,” Patel said. So, the stick.

Wellness programs that penalize employees have been controversial and challenged as illegal. “Some people tend to think that the loss framing is a little bit harsh,” said Patel. That tactic puts more of a financial burden on employees to cover health insurance. Others argue it’s a way to discriminate against less healthy workers. The Equal Employment Opportunity Commission has filed several lawsuits against companies for designing what it believes are discriminatory wellness programs, though the agency has been largely unsuccessful so far.

Employers like penalties because they work. And so far, judges have ruled in their favor. “We’re seeing the courts take a little bit different view of incentives,” said Patricia Nemeth, a partner at Nemeth Law PC, which specializes in labor law. “And it sounds like the view that the courts are taking is the one that’s working.”

While Patel’s new study did prove the power of taking money away, it only framed the incentive as a loss—it was actually still a net gain: The researchers gave participants money, and then took it away for failure. “They never had anything to lose in the first place, at the end of the day you made the same amount,” Dr. Patel explained. Some wellness programs are more aggressive, straight up making people pay for noncompliance. Broward County, a defendant in one wellness court case, required people who opted out of its program to pay $20 every other week. The plaintiff alleged that the threat violated the American With Disabilities Act and that the penalty made the program nonvoluntary. In that case, a federal appeals court in Atlanta ruled for the employer.

With more evidence that penalties work, and few courts ruling in favor of employees, there’s no reason for companies to choose carrots over sticks. “Employers will continue to do it until they can’t,” added Luttrell.

Source: Bloomberg Business

Date: 16/02/2016