Unit:4

Life Insurance

Q1) Discuss the laws relating to life insurance

A1) Life Insurance Corporation Act,1956

Life Insurance Business in India was nationalized with effect from January 19, 1956. On the date, the Indian business of 16 non-Indian insurers operating in India and 75 Provident Societies were taken over by Government of India. Life Insurance Corporation of India, Act was passed by the Parliament on June 18, 1956 and came into effect from July 1, 1956. Life Insurance Corporation of India commenced its functioning as a corporate body from September 1, 1956. Its working is governed by the LIC Act. The LIC is a corporate having perpetual succession and a common seal with a power to acquire hold and dispose of property and can by its name sue and be sued. Important Provisions of Life Insurance CorporationAct,1956

1.Constitution

2.Capital

3. Functions of the Corporation

4.Transfer of Services

5. Set-up of the Corporation

6. Committee of the Corporation

7. Authorities

8. Finance, Accounts and Audit

9. Miscellaneous

Life Insurance Corporation of India (LIC)

The LIC of India was set up under the LIC Act, 1956 under which the life insurance was nationalised. As a result, business of 243 insurance companies was taken over by LIC on 1 -9-1956. It is basically an investment institution, in as much as the funds of policy holders are invested and dispersed over different classes of securities, industries and regions, to safeguard their maximum interest on long term basis. LIC is required to invest not less than 75% of its funds in Central and State Government securities, the government guarantee d marketable securities and in the socially-oriented sectors. At present, it is the largest institutional investor. It provides long term finance to industries. Besides, it extends resource support to other term lending institutions by way of subscription to their shares and bonds and also by way of term loans. LIC which has entered into its 57th year has emerged as the world’s largest insurance co. In terms of number of policies covered. The LIC’s total coverage of policies including individual, group and social schemes has crossed the 11 crore.

Q2) What are the objectives of LIC of India?

A2) Objectives of LIC of India

The LIC was established with the following objectives:

1. Spread life insurance widely and in particular to the rural areas, to the socially and economically backward claries with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost

2. Maximisation of mobilisation of people’s savings for nation building activities.

3. Provide complete security and promote efficient service to the policy-holders at economic premium rates.

4. Conduct business with utmost economy and with the full realisation that the money belong to the policy holders.

5. Act as trustees of the insured public in their individual and collective capacities. 6. Meet the various life insurance needs of the community that would arise in the changing social and economic environment

7. Involve all people working in the corporation to the best of their capability in furthering the interest of the insured public by providing efficient service with courtesy.

Q3) What are the role and functions of LIC?

A3) The role and functions of LIC may be summarised as below:

1. It collects the savings of the people through life policies and invests the fund in a variety of investments.

2. It invests the funds in profitable investments so as to get good return. Hence the policy holders get benefits in the form of lower rates of premium and increased bonus. In short, LIC is answerable to the policy holders.

3. It subscribes to the shares of companies and corporations. It is a major shareholder in a large number of blue chip companies. 4. It provides direct loans to industries at a lower rate of interest. It is giving loans to industrial enterprises to the extent of 12% of its total commitment.

5. It provides refinancing activities through SFCs in different states and other industrial loan- giving institutions.

6. It has provided indirect support to industry through subscriptions to shares and bonds of financial institutions such as IDBI, IFCI, ICICI, SFCs etc. at the time when they required initial capital. It also directly subscribed to the shares of Agricultural Refinance Corporation and SBI.

7. It gives loans to those projects which are important for national economic welfare. The socially oriented projects such as electrification, sewage and water channelising are given priority by the LIC.

8. It nominates directors on the boards of companies in which it makes its investments.

.9. It gives housing loans at reasonable rates of interest.

10. It acts as a link between the saving and the investing process. It generates the savings  of the small savers, middle income group and the rich through several schemes.

Formerly LIC has played a major role in the Indian capital market. To stabilise the capital market it has underwritten capital issues. But recently it has moved to other avenues of financing. Now it has become very selective in its underwriting pattern.

Q4) Give the general principles of life insurance contract

A4)

1. Insurable interest

The insured must have insurable interest in the life assured. In absence of insurable interest, Contract of insurance is void. Insurable interest must be present at the time of entering into contract with insurance company for life insurance. It is not necessary that the assured should have insurable interest at the time of maturity also.

2. Utmost good faith

The contract of life insurance is a contract of utmost good faith. The insured should be open and truthful and should not conceal any material fact in giving information to the insurance company, while entering into a contract with insurance company. Misrepresentation or concealment of any fact will entitle the insurer to repudiate the contract if he wishes to do so.

3. Not a contract of indemnity

The life insurance contract is not a contract of indemnity. A Contract of life insurance is not a contract of indemnity. The loss of life cannot be compensated and only a fixed sum of money is paid in the event of death of the insured. So , the life insurance contract is not a contract of indemnity. The loss resulting from the death of life assured cannot be calculated in terms of money. Features of Life Insurance Since the life insurance is not an indemnity contract, the insurer, in his part, is required to pay a definite sum of money agreed on maturity of policy at the death or an amount in installment for a fixed period or during life.

Q5) Explain the Proposal form and Policy document

A5) Proposal form is the basis of the Insurance contact between the Insurer and the insured. The details filled in the insurance proposal form is critical for the company to accept or reject the policy.

When anyone applies for an insurance policy, the proposer who is the payer or life to be insured in the Insurance policy fills the proposal form. This is the most important document which provide the complete details of the proposer and the life to be insured in the policy. Based on the information provided in the document the company will evaluate the risk to be insured and decide the premium rates applicable. They may also decide the condition on which the company is ready to accept the risk. A proposal form is a legal document that seeks relevant information from you so that the insurance company understands you well.

A proposal form in insurance is not just about giving out your details such as your name, age, gender and address. It seeks all the relevant information from you that helps the insurance company in underwriting. Underwriting is a process that financial companies use to assess your eligibility to receive their products. In case of life insurance, for instance, the proposal form will ask for details including your age, income and occupation. These details are relevant because mentioning your age ascertains the premium you pay, and income ascertains the amount of insurance you can buy. The form will also ask for nominee details which is essential because you need to make sure that the benefit reaches the right hands. Apart from all this, the proposal form will also ask you about your medical condition and any medical history. Typically, the insurer looks for ailments that may increase their risk. Also, depending on the level of cover you choose, you may be asked to go for medical check-ups.

Policy

Policy document is a detailed document and it is the Evidence of the insurance contract which mentions all the terms and conditions of the insurance. The insured buys not the policy contract, but the right to the sum of money and its future delivery. The insurer on its part promises to pay a sum of money, provided of course the insured keeps its part of promise of paying the instalments of premium as scheduled. The pre-amble to the insurance contract makes the above statement clear and states that this policy is issued subject to the conditions and privileges printed on the back of the policy. The endorsements placed on the policy shall also be part of the policy and it also makes a reference to the proposal form saying that that the statements given in the proposal form are the basis of the contract. The schedule which is printed on the policy document identifies the office which has issued the policy. It states the name of the policyholder, the date of commencement of the policy, an identification number of the policy called policy number. This number is extremely useful for making any reference to the insurer relating to this policy. This shall avoid needless delay. Beneficiary’s name is also mentioned along with address. It is necessary to check that it is correct and any mistake should be immediately pointed out for correction. A mistake in the address may misdirect the premium notices and any other future correspondence. It also states the name of the nominee and the date up to which premium has to be paid. The schedule goes on to mention, the type of policy, on the happening of which, the sum assured is payable and to whom it is payable. It of course also mentions when and how long the premium is to be paid. The policy document is signed by an official of the insurer and dated and stamped as per the provision of the Stamp Act to make it a completely legally enforceable document.

Q6) Discuss the meaning of Assignment and Nomination

A6)The life insurance policy can be assigned free for a legal consideration or love and affection. The insured may assigned to anybody on any ground. As such, the assignment shall be complete and effectual only on the execution of such endorsement either on the policy itself or by a separate deed.

Nomination

Generally nomination is made at the time of taking a policy. In case it is not done, it is possible to make nomination subsequently by an endorsement on the policy. It is also possible to change a nomination subsequently by an endorsement. After marriage, such change in nomination is normally required.

Assignment

An assignment of a policy in favour of another person or institution can be effected by an endorsement on the policy. Re-assignment can also be done by a subsequent endorsement on the same policy

Q7)  Explain the meaning of Title

A7)Title

Title insurance is a form of indemnity insurance that protects lenders and homebuyers from financial loss sustained from defects in a title to a property. The most common type of title insurance is lender's title insurance, which the borrower purchases to protect the lender. The other type is owner's title insurance, which is often paid for by the seller to protect the buyer's equity in the property. A clear title is necessary for any real estate transaction. Title companies must do a search on every title in order to check for claims or liens of any kind against them before they can be issued. A title search is an examination of public records to determine and confirm a property's legal ownership and to find out whether there are any claims are on the property. Erroneous surveys and unresolved building code violations are two examples of blemishes that can make the title "dirty."Title insurance protects both lenders and homebuyers against loss or damage occurring from liens, encumbrances, or defects in the title or actual ownership of a property. Common claims filed against a title are back taxes, liens (from mortgage loans, home equity lines of credit (HELOC), and easements), and conflicting wills. Unlike traditional insurance, which protects against future events, title insurance protects against claims for past occurrences.

A basic owner's basic title insurance policy typically covers the following hazards:

• Ownership by another party
• Incorrect signatures on documents, as well as forgery and fraud
• Flawed records
• Restrictive covenants (terms that reduce value or enjoyment), such as unrecorded easements
• Encumbrances or judgments against property, such as outstanding lawsuits and liens

Q8) Discuss the formalities Claim

A8) Formalities for a death claim

When a person with a life insurance policy – called a life assured – dies, a claim intimation should be sent to the insurance company as early as possible. The assignee or nominee under the policy can do this. So can any close relative or the agent who handles the policy.The claim intimation should contain information like the date, place and cause of death. The insurance agent has the duty to help the life assured’s family/ assignee to deal with the insurance company to fulfil the formalities for a claim.

The insurance company will respond to this intimation and will ask for the following documents:

• Filled-up claim form (provided by the insurance company)
• Certificate of death
• Policy document
• Deeds of assignments/ re-assignments if any
• Legal evidence of title, if the policy is not assigned or nominated
• Form of discharge executed and witnessed

Other documents such as medical attendant's certificate, hospital certificate, employer's certificate, police inquest report, post mortem report etc could be called for, as applicable.

Formalities for a maturity claim

Where a life insurance policy is maturing, the insurance company will usually send intimation to the policyholder along with a discharge voucher at least two to three months in advance of the date of maturity giving details like the maturity amount payable.

The policyholder has to sign the discharge voucher – which is like a receipt – have his signature witnessed and send it back to the insurance company along with the original policy bond to enable it to make the payment.

If the policy has been assigned in favour of any other person or entity – like a housing loan company – the claim amount will be paid only to the assignee who will give the discharge.

Q9) Give the laws relating to general insurance

A9)The General Insurance Business Nationalization Act was passed in 1972 to set up the general insurance business. It was the nationalization of 107 insurance companies into one main company called General Insurance Corporation of India and its four subsidiary companies with exclusive privilege for transacting general insurance business. This act has been amended and the exclusive privilege ceased on and from the commencement of the insurance regulatory and development authority act 1999. General Insurance Corporation has been working as a reinsurer in India. Their subsidiaries are working as a separate entity and plays significant role in the public sector of general insurance.

General Insurance Corporation of India (GIC)

General insurance industry in India was nationalised and a government company known as General Insurance Corporation of India was formed by the central government in November, 1972. General insurance companies have willingly catered to these increasing demands and have offered a plethora of insurance covers that almost cover anything under the sun.

Q10) Give the objectives, role and functions of GIC?

A10) Objective of the GIC are:

1. To carry on the general insurance business other than life, such as accident, fire etc.

2. To aid and achieve the subsidiaries to conduct the insurance business and

3. To help the conduct of investment strategies of the subsidiaries in an efficient and productive manner.

Role and Functions of GIC

a. Carrying on of any part of the general insurance, if it thinks it is desirable to do so.

b. Aiding, assisting and advising the acquiring companies in the matter of setting up of standards of conduct and sound practice in general insurance business.

c. Rendering efficient services to policy holders of general insurance.

d. Advising the acquiring companies in the matter of controlling their expenses including the payment of commission and other expenses.

e. Advising the acquiring companies in the matter of investing their fund.

f. Issuing directives to the acquiring companies in relation to the conduct of  general insurance business.

g. Issuing directions and encouraging competition among the acquiring companies in order to render their services more efficiently.

Q11) Mention the different types of general insurance

A11) Almost everything is insurable. However, General Insurance in India is bifurcated as Fire, Engineering, Marine and Miscellaneous Insurance. Let us look at them as per the use and general acceptability. Following are the different types of General Insurances in India:

• Health Insurance
• Travel Insurance
• Motor Insurance
• Marine Insurance
• Home Insurance
• Commercial Insurance
• Digit Insurance also offers insurance policies for Mobile, Bicycle, Shop Protection, and others.

Q12) Explain Health Insurance

A12) Health Insurance

The Health Insurance cover from Digit offers protection for the medical expenses incurred due to hospitalization caused because of an accident or illnesses. Although every policy is different, based on who it's being purchased for, it mainly covers:

• Accidental Hospitalization (pre & post)
• Accidental illness and hospitalization
• Daycare procedures
• Psychiatric Support
• Annual Health Checkups
• Daily Hospital Cash

The cover can be extended to cover the following with some predefined conditions:

• Maternity benefit with Infertility benefit
• Critical Illness
• Organ Donation
• AYUSH (Alternate Treatment)

The premium for the health insurance is charged on the basis of:

• Age
• Pre-existing illness
• Lifestyle Habits
• Type of coverage
• Your family health history

Q13) Explain travel insurance

A13)  Travel Insurance

Travel Insurance covers your financial liability, if any, when you travel within or beyond the Indian boundaries. The financial liability may arise due to medical or non-medical emergencies. The duration of the travel for one time can be 180 days at the maximum. The policyholder can take more than one trip in a year. Your Travel Insurance will cover:

• Loss of Baggage
• Loss of Passport
• Hijacking
• Medical Emergencies
• Delayed Flights
• Accidental Deaths
• Adventure Sports

Digit’s Travel cover comes with worldwide support and special features like:

• Zero Deductibles.
• Smartphone enabled claim process.
• Customized Travel Plan Cover.
• Missed call claim facilitation.

Q14) Explain Motor Insurance

A14)  Motor Insurance

A Motor Insurance Policy is mandatory to be able to drive legally in India. Broadly there are two types a) Third-Party Liability b) Comprehensive Package Policy.

A Third-Party Policy covers for losses faced in a situation where your vehicle damages any third-party such as a public property, person or third-party vehicle. The same is the minimum requirement to be able to drive legally in India, as stated by the Motor Vehicles Act.

A Comprehensive Package Policy covers both third-party damages and liabilities and damages/losses caused to you and your own vehicle. The losses may arise due to an accident, theft, fire, natural calamities, and others.

Digit Insurance provides some add-ons under its Comprehensive Package Policies for Cars and Bikes that act as additional shields to your vehicle, such as:

• Tyre Protect Cover
• Zero Depreciation Cover
• Return to Invoice
• Engine and Gearbox Protection
• Breakdown Assistance Cover

Q15) What is Home Insurance?

A14) You build your home with your toil and hard earned money. Everything you buy is a priceless possession for you and hence it needs to be protected.A Home Insurance Policy protects your valuable and other assets. It is a comprehensive package policy that covers all valuables.Digit Insurance gives protection for Home against Burglary, Loss/Damage of Jewelry, Fire and Natural Disasters.

Q16) Explain Commercial Insurance

A15) The lines of insurance that affects the business operations in the real terms are categorized under the Commercial Lines of Insurance. Type of the insurance covers that one can buy may include:

• Property Insurance
• Engineering Insurance
• Liability Insurance
• Marine Insurance
• Employees Benefit Insurance
• Business Interruption

Depending on the type of occupation, risk exposure, and the money involved, the insurance could be different for each industry or business.For example; an insurance that is specific to a cement plant, versus one for an IT company will be different. The premium charged for a cement plant will be higher than a showroom of air conditioner.

Therefore, Insurance is completely based on the level of the risk exposure. A worker in the cement plant is more prone or susceptible to injury than to the one who is working in the showroom.

Q17) Discuss Mobile Insurance and Bicycle Insurance

A16) Mobile Insurance

A mobile insurance protects the phone from accidental damage. Under the mobile protection cover, Digit Insurance compensates for repair of accidental screen damage to your phone. The buyers can have mobile insurance for both an old or new phone. Very affordable insurance protection for the most expensive phones you buy.

Bicycle Insurance

Not just the cars and two wheelers, people are now passionate for expensive bicycles also. Call it a fashion or change of lifestyle, Bicycle Insurance is another sought product these days. Digit Insurance offers cover against Personal Accident, Theft, Accidental Damage, and Hospital woes.

Q18) Give the differences General insurance vs life insurance

A17) Life Insurance Vs General Insurance

• Types

Life insurance is a non-personal insurance contract. This means that the policyholder and the person being insured do not have to be the same person. General insurance is always a personal contract where the insurance company contracts with you directly for insurance protection.

• Function

Both life insurance and general insurance accept premiums in exchange for insurance benefits. Insurance premiums are invested into bonds or bond-like investments that produce stable and consistent returns for the insurance company. The investments, plus premium payments, also ensure that the insurance company can pay the promised benefits that are outlined in the insurance policy. When you need to file a claim, both types of insurance require a claim form for you to fill out. The payment of benefits, and the amount of the benefit that is payable, are always spelled out in your insurance contract.

• Significance

Life insurance insures your life or the life of someone that you have an economic interest in, like your spouse, children, siblings or business partners. When the insured individual dies, the life insurance policy pays a death benefit that is fixed. This is called a valued contract. A valued contract pays a fixed sum of money, regardless of the nature of the loss insured by the contract. General insurance insures homes, automobiles and other personal property. This type of insurance is sometimes referred to as "property and casualty" insurance. General insurance is indemnity insurance. Indemnity insurance pays just enough money to you to repair or replaced the insured property. For example, your homeowner's insurance may cover your entire home and the contents of it. However ,if your roof is damaged in a storm, the policy only pays enough to repair the damage.

• Benefits

The benefit of life insurance is that it pays off any financial obligations you have left after you die. It can pay more than that, however, because life insurance pays a fixed amount. Death benefits can be used to create wealth for the surviving beneficiaries, or they can be used to replace the primary income earner's salary for a surviving spouse. General insurance is beneficial in that the insurance ensures that, almost regardless of the damage done, that the property will be repaired or replaced. While general insurance generally has a maximum payout determined by the value of your property, it does not pay a fixed amount, so you won't have to guess at how much insurance you need to purchase.

• Expert Insight

Both types of insurance are necessary to protect your life and your property. They each serve a different function and fill specific roles in your insurance plan. When buying life insurance, only buy enough insurance to cover your current and expected future financial liabilities. When purchasing general insurance, the maximum coverage should not extend beyond the total replacement value of your property.

Q19) Give an overview of Insurance business in India

A18) Insurance business in India

The insurance industry of India consists of 53 insurance companies of which 24 are in life insurance business and 29 are non-life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the sole public sector company. Apart from that, among the non-life insurers there are six public sector insurers. In addition to these, there is sole national reinsurer, namely, General Insurance Corporation of India (GIC Re). Other stakeholders in Indian Insurance market include agents (individual and corporate), brokers, surveyors and third party administrators servicing health insurance claims. Out of 29 non-life insurance companies, five private sector insurers are registered to underwrite policies exclusively in health, personal accident and travel insurance segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd, Religare Health Insurance Company Ltd and Cigna TTK Health Insurance Company Ltd. There are two more specialised insurers belonging to public sector, namely, Export Credit Guarantee Corporation of India for Credit Insurance and Agriculture Insurance Company Ltd for crop insurance.

Market Size

During April 2015 to February 2016 period, the life insurance industry recorded a new premium income of Rs 1.072 trillion (US$ 15.75 billion), indicating a growth rate of 18.3 per cent. The general insurance industry recorded a 14.1 per cent growth in Gross Direct Premium underwritten in FY2016 up to the month of February 2016 at Rs 864.2 billion (US$ 12.7 billion). India's life insurance sector is the biggest in the world with about 360 million policies which are expected to increase at a Compound Annual Growth Rate (CAGR) of 12- 15 per cent over the next five years. The insurance industry plans to hike penetration levels tfive per cent by 2020. The country’s insurance market is expected to quadruple in size over the next 10 years from its current size of US$ 60 billion. During this period, the life insurance market is slated to cross US$ 160 billion. The general insurance business in India is currently at Rs 78,000 crore (US$ 11.44 billion) premium per annum industry and is growing at a healthy rate of 17 per cent .The Indian  insurance market is a huge business opportunity waiting to be harnessed. India currently accounts for less than 1.5 per cent of the world’s total insurance premiums and about 2 per cent of the world’s life insurance premiums despite being the second most populous nation. The country is the fifteenth largest insurance market in the world in terms of premium volume, and has the potential to grow exponentially in the coming years.

Investments

The following are some of the major investments and developments in the Indian insurance sector. The Insurance sector in India is expected to attract over Rs 12,000 crore (US$ 1.76 billion) in 2016 as many foreign companies are expected to raise their stake in private sector insurance joint ventures. Global, a pure-play engineering and Research and Development (R&D)services provider, has raised investment of around Rs 2,396 crore (US$ 351.54million) from leading global investors Bain Capital, GIC and Advent International for a minority stake in the company.  Foreign Direct Investment in the insurance sector stood at US$ 341 million in March- September, 2015, showing a growth of 152 per cent compared to the same period last year.

Insurance firm AIA Group Ltd has decided to increase its stake in Tata AIA Life Insurance Co Ltd, a joint venture owned by Tata Sons Ltd and AIA Group from 26 per cent to 49 per cent.  Canada-based Sun Life Financial Inc plans to increase its stake from 26 per cent to 49 per cent in Birla Sun Life Insurance Co Ltd, a joint venture with Aditya Birla Nuvo Ltd, through buying of shares worth Rs 1,664 crore (US$ 244.14 million). Nippon Life Insurance, Japan’s second largest life insurance company, has signed definitive agreements to invest Rs 2,265 crore (US$ 332.32 million) in order to increase its stake in Reliance Life Insurance from 26 per cent to 49 per cent. The Central Government is planning to launch an all-in-one insurance scheme for farmers called the Unified Package Insurance Scheme (Bhartiya Krishi Bima Yojana).

The proposed scheme will have various features like crop insurance, health cover,personal accident insurance, live stock insurance, insurance cover for agriculture implements like tractors and pump sets, student safety insurance and life insurance.  Government launched a special enrolment drive, Suraksha Bandhan Drive comprising of sale of gift cheques and launch of deposit schemes in bank branches, to facilitate enrolment under Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).  To increase the subscriber base and ensure wider reach, the Central Government has eased several norms for its flagship insurance scheme Atal Pension Yojana (APY),in terms of more options for periodical contributions, voluntary and premature exits and simplified penalty for payment delays. Bennett Coleman and Co. Ltd (BCCL), the media conglomerate with multiple publications in several languages across India, is set to buy Religare Enterprises Ltd’s entire 44 per cent stake in life insurance joint venture Aegon Religare Life Insurance Co. Ltd. The foreign partner Aegon is set to increase its stake in the joint venture from 26 per cent to 49 per cent, following government’s reform measure allowing the increase in stake holding by foreign companies in the insurance sector.  GIC Re and 11 other non-life insurers have jointly formed the India Nuclear Insurance Pool with a capacity of Rs 1,500 crore (US$ 220.08 million) and will provide the risk transfer mechanism to the operators and suppliers under the CLND Act.  State Bank of India has announced that BNP Paribas Cardif is keen to increase its stake in SBI Life Insurance from 26 per cent to 36 per cent. Once the foreign joint venture partner increases its stake to 36 per cent, SBI’s stake in SBI Life will get diluted to 64 per cent.

Government Initiatives

The Government of India has taken a number of initiatives to boost the insurance industry.

Some of them are as follows:

The Union Budget of 2016-17 has made the following provisions for the Insurance Sector: Foreign investment will be allowed through automatic route for up to 49 per cent subject to the guidelines on Indian management and control, to be verified by the regulators. Service tax on single premium annuity policies has been reduced from 3.5 per cent to 1.4 per cent of the premium paid in certain cases.

Government insurance companies to be listed on the exchanges  Service tax on service of life insurance business provided by way of annuity under the National Pension System regulated by Pension Fund Regulatory and Development Authority (PFRDA) being exempted, with effect from 1 April 2016.  The Insurance Regulatory and Development Authority (IRDA) of India has formed two committees to explore and suggest ways to promote e-commerce in the sector in order to increase insurance penetration and bring financial inclusion. IRDA has formulated a draft regulation, IRDAI (Obligations of Insures to Rural and Social Sectors) Regulations, 2015, in pursuance of the amendments brought about under section 32 B of the Insurance Laws (Amendment) Act, 2015. These regulations impose obligations on insurers towards providing insurance cover to the rural and economically weaker sections of the population.  The Government of India has launched two insurance schemes as announced in Union Budget 2015-16. The first is Pradhan Mantri Suraksha Bima Yojana (PMSBY), which is a Personal Accident Insurance Scheme. The second is Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which is the government’s Life Insurance Scheme. Both the schemes offer basic insurance at minimal rates and can be easily availed of through various government agencies and private sector outlets.  The Uttar Pradesh government has launched a first of its kind banking and insurance services helpline for farmers where individuals can lodge their complaints on a toll free number.  The select committee of the Rajya Sabha gave its approval to increase stake of foreign investors to 49 per cent equity investment in insurance companies.  Government of India has launched an insurance pool to the tune of Rs 1,500 crore (US$ 220.08 million) which is mandatory under the Civil Liability for Nuclear Damage Act (CLND) in a bid to offset financial burden of foreign nuclear suppliers.