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EPFO Likely to Raise Insurance Cover: 10 Developments

Employees Provident Fund Organisation is likely to increase the maximum insurance cover for subscribers under the Employees' Deposit Linked Insurance Scheme. A committee is likely to take up the proposal for discussion on September 9. After the committee's nod, it will then be placed before the EPFO's apex decision making body the Central Board of Trustees' (CBT) headed by the Labour Minister. If implemented, the maximum insurance coverage could go up from Rs 3.6 lakh to Rs 5.5 lakh.

Here Are Top 10 Developments

1) Employees Deposit Linked Insurance scheme provides a lumpsum payment to the nominee in the event of the subscriber's death.

2) The proposal to raise the insurance benefit will benefit over six crore subscribers of the Employees' Provident Fund Organisation (EPFO).

3) Under the insurance scheme, 0.5 per cent of the basic wages of employees is contributed as insurance premium every month.

4) At present, in case of demise of a subscriber after one year continuous service, the nominee gets 20 times of average wage drawn during the past 12 months with 20 per cent bonus on it.

5) With the wage ceiling of Rs 15,000 per month, the maximum amount assured works out to be Rs 3.6 lakh.

6) It is now proposed that the maximum benefit should be raised to 30 times of the average pay drawn during preceding 12 months in addition to 50 per cent of the average balance of the employee provident fund account, subject to a ceiling of Rs 1 lakh. Once approved, the maximum sum assured will increase to Rs 5.5 lakh.

7) The PF body also seeks to simplify the insurance norms for subscribers with less than 12 months of service. Under the existing scheme, the subscribers with less than 12 months of service are entitled to a maximum sum of Rs 1.2 lakh.

8) In another development, Labour Minister Bandaru Dattatreya had earlier said that the PF body is further simplifying its forms to ensure hassle free services its subscribers. It is proposed that attestation of employer will no longer be required in cases where the employees have got their KYC information including Aadhar seeded and have activated their UAN (Universal Account Number).

9) The PF body is also likely to discuss this month the rate of interest on deposits for the current fiscal.

10) The EPFO had paid 8.75 per cent rate of interest for 2013-14 and 2014-15 financial years to its subscribers.

Investing in India’s Insurance Sector

The Indian Parliament recently enacted changes to the Insurance Act of 1938, which raise the foreign direct investment (FDI) cap in Indian insurance companies from 26 percent to 49 percent. Since by law only domestic insurance companies are allowed to carry out the business of insurance, FDI through a joint venture is the typical process by which foreign companies acquire ownership of Indian insurance companies.

The change in the FDI cap, designed to bring investment to India’s under-capitalized insurance sector, has encouraged insurance companies worldwide to consider opening or expanding operations in India. But as recent regulatory issues and failed joint ventures suggest, companies will want to bear in mind the financial implications of entering into a joint venture. This article provides some considerations for entering the market, along with an overview of life and non-life insurance sector financial performance.

Investing in India’s Insurance Sector - India Briefing News India recently raised the FDI cap for the insurance sector – how can foreign businesses participate in the market?

http://www.financialexpress.com/article/industry/insurance/shriram-life-insurance-q1-fy16-pat-up-by-42-at-inr-17-crores/118249/

Shriram Life Insurance Q1 FY’16 PAT up by 42 % at INR 17 Crores Shriram Life Insurance, the life insurance arm of Shriram Group announced its results for the first quarter ended June 30, 2015.

PM Modi’s gift to Varanasi on Raksha Bandhan: Accident insurance for 51,000 women On the occasion of Raksha Bandhan, Union minister Piyush Goyal on Saturday said here that as many as 51,000 women and girls of Varanasi will be insured under the Pradhan Mantri Suraksha Bima Yojana as a gift from the Prime Minister.

Pension biz of life insurers plunges 90% to Rs 2K crore
The fall in pension business is due to a special tax treatment for the New Pension System (NPS) and a regulatory clause that makes it mandatory for life insurers to offer guaranteed returns to subscribers.