Allow life insurers to sell pension-based health policies: HDFC Life chief

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Regulators in India should allow the life insurance firms to sell pension indemnity based health insurance policies, as it will lead to greater penetration of insurance in the country, HDFC Life chairman Deepak Parekh said on Monday.


Today, life insurers can only sell life insurance policies at their branches through their employees. They cannot sell, for example, NPS under the National Pension System or health indemnity covers such as mediclaim, Parekh said while addressing the shareholders at the company’s annual general meeting (AGM).





“Across the world, both pension health cover are very much part of life insurance, as they protect people from longevity morbidity risks.


“Hence, allowing life insurers to distribute products such as health indemnity, NPS would help improve the much-needed insurance reach across the country,” he said.


An indemnity-based health cover reimburses the policyholder the cost of medical expenses.


Speaking about the fiscal ended March 2021, marred by the pandemic, he said HDFC Life insured close to 4 crore lives settled over 2.9 lakh death claims in FY2020-21 despite operational challenges.


“That resulted in beneficiaries being paid over Rs 3,000 crore in total (during FY21),” he added.


He also informed that the company lost 17 employees 38 financial consultants over the past 15 months.


However, Parekh said that India is at the cusp of recovery after being battered by the second wave of COVID-19.


The economy is expected to grow in the range of 8-10 per cent in financial year FY22 on a low base of FY21, he said, adding the resilience of HDFC Life’s differentiated business model, supported by the diversified distribution network, marketing reaching innovation, customer focussed technology the brtrust helped the company in soliciting its business.


“We ranked consistently among the top two companies in the private sector in terms of new business premium closing the year at Rs 21,110 crore with a market share 21.5 per cent.


We closed financial year 21 with an embedded value of Rs 26,617 crore an operating return on embedded value of 18.5 per cent on account of higher volume, higher value of the new business (among others),” Parekh noted.


HDFC Life on Monday reported a 33 per cent decline in its net profit to Rs 302 crore in the first quarter ended June this fiscal, mainly due to the adverse impact of the coronavirus pandemic.


The insurer had posted a net profit of Rs 451 crore in the same quarter previous fiscal. The total premium during Q1 FY22, however, increased by 31 per cent to Rs 7,656 crore as against Rs 5,863 crore in the same period of FY21, HDFC Life said in a regulatory filing.


The insurer witnessed a 20 per cent growth in renewal premium in April-June of 2021-22.


“In the quarter gone by, we witnessed a steep rise in death claims with peak claims in wave two at around 3-4 times of the peak claim volumes in the first wave. We paid over 70,000 claims in Q1.


“The gross net claims provided for amounted to Rs 1,598 crore Rs 956 crore, respectively. It appears that claims on individual business have peaked in June expect them to normalise in the coming months with more people getting vaccinated a fall in the absolute number of infections,” HDFC Life said on the impact of the pandemic on the business during the quarter.


HDFC Life said it has created Rs 700 crore of the excess mortality reserve. It has also provided for Rs 165 crore additional COVID-19 reserve for the current fiscal year.


The chairman said the company will enhance the reserve as when any such need arises.


HDFC Life is resilient enough to absorb the impact of the pandemic, he added.

(Only the headline picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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NCLAT stays NCLT’s nod to Twinstar’s resolution plan for Videocon Group

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The National Company Law Appellate Tribunal (NCLAT) has stayed the approval granted by the Mumbai Bench of the National Company Law Tribunal (NCLT) to the resolution plan submitted for the beleaguered Videocon Group by Twinstar Technologies, a promoter entity of Vedanta Resources.


This came after an appeal by Bank of Maharashtra, one of the dissenting creditors, the matter is slated to be heard on September 7.





“… the impugned order is stayed till the next date status quo ante as before passing of the impugned order is directed to be maintained,” said the NCLAT, in its order on Monday. It has asked the respondent to file reply affidavits within two weeks.


Bank of Maharashtra, in its appeal, has alleged that the order of NCLT approving the resolution plan is “ex-facie illegal”, bad in law, contrary to the settled provisions of the Insolvency Bankruptcy Code (IBC) of 2016. The bank has an exposure of Rs 1,216.88 crore to the Videocon Group.


In its appeal, the appellant has said, in the various committee of creditors (CoC) meetings, lenders raised concerns regarding the distribution mechanism for the dissenting financial creditors.


Despite that, the resolution professional dismissed the concerns raised moved ahead with the voting on the plan.


The appellant has alleged that the “resolution plan” provided for payment to the dissenting financial creditors by way of non-convertible debentures (NCDs) equities, which is not permissible under IBC.


Also, the plan provides that the dissenting financial creditors will be paid the liquidation in a staggered manner. The appellant has said that the NCLAT directed the CoC to make payments according to liquidation value to all dissenting creditors in cash upfront before any payment is made to the assenting financial creditors.


However, it failed to address the fact that such directions amount to modification in the resolution plan, which according to the Supreme Court, is impermissible.


The only option available before the adjudicating authority, if it observes that the plan is contrary to the provisions of the IBC, is to send back the plan to the CoC for reconsideration of appropriate modifications.


The appellant said, according to SBI CAPS, the process advisor, it would have received Rs 59.27 crore, out of which Rs 8.14 crore would have been upfront cash Rs 51.13 crore through NCDs, had it assented to the plan.


Also, the liquidation value of the appellant’s share was Rs 41.85 crore in case of dissent to the plan. However, it highlighted that there was some discrepancy in FORM H, which showed that the total amount payable to the dissenting financial creditors, which included IFCI, was Rs 105.23 crore.


But, according to SBI CAPS calculation, the amount payable to the Bank of Maharashtra IFCI totaled Rs 111.85 crore.


Last month, NCLT had approved the resolution plan of Twinstar Technologies for Videocon Group but had raised concerns that the successful resolution applicant is “paying almost nothing” as the amount offered is only 4.15 per cent of the total outstanding claims. It noted that the hair cut for all the creditors is 95.85 per cent suggested to both the CoC the successful applicant an increase in the payout.


Of the total claim amount of Rs 71,433.75 crore, claims admitted were to the tune of Rs 64,838.63 crore, the resolution plan that was approved was only for an amount of Rs 2,962.02 crore.


According to the resolution plan, against the claim of Rs 61,773 crore made by financial creditors, an amount of Rs 200 crore as upfront cash thereafter NCDs worth Rs 2,700 crore that will be redeemable in 5 installments, with a coupon rate of 6.65 per cent, has been promised by the successful resolution application.


The fair value of the Videocon Group was Rs 4,069.95 crore, whereas the liquidation value was Rs 2,568.13 crore.

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AGR dues cannot be recomputed: Supreme Court reserves order

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The Supreme Court (SC) on Monday maintained its ston the government’s adjusted gross revenue (AGR) demfrom telecom firms, observing that it had multiple times said the dues can’t be recomputed. It, however, reserved the order.


Three telecom firms — Bharti Airtel, Vodafone Idea Tata Teleservices — had moved the apex court seeking correction in calculation errors in the Department of Telecommunications’ (DoT’s) AGR demand.





Vodafone Idea counsel Mukul Rohatgi said the AGR figures were not cast in stone the SC has the powers to correct the arithmetic error, while clarifying that no one was blaming DoT for this as these are arithmetical entries.


He urged the court that the calculations be placed before DoT the department be told to take a call. “Allow me to place these entries before DoT let them take a call on this,” he said, making it clear that they were not seeking any extension of time.


The firm also informed the court of its financial situation due to the Rs 58,400-crore AGR dues its surmounting debt of Rs 1.8 trillion. Bharti Airtel’s counsel A M Singhvi said there are cases of duplication also of payments made but not accounted for in the calculation of AGR dues. He said certain permissible deductions have not been allowed.


The company said it was only asking for these issues, errors to be considered by DoT.


“I don’t want to pay thousands of crores on account of these errors,” he said.


Senior advocate Arvind Datar, appearing for Tata Teleservices, said the SC judgment only prohibits reassessment does not bar rectification of calculative errors.


The SC Bench then asked Solicitor General Tushar Mehta, appearing for DoT, about the issues raised by the telcos. “I must point out that I don’t have the instructions on this,” he said, adding that he can take instructions on this within two days. “It may be a little hazardous for me to make a statement without taking instructions. Within a day or two, I will get concrete instructions,” he said.


The Bench said some other applications, including those raising the question whether airwaves or spectrum can be transferred or sold by telcos as part of their assets, would be heard after two weeks.


On September 1, 2020, the SC allowed the firms to pay the AGR dues in instalments over a ten-year period. They were told to begin by making an upfront payment of 10 per cent of the total dues.


The payment timeline started from April 1, 2021.


The apex court also said the sale of spectrum should be decided by the National Company Law Tribunal (NCLT) under the Insolvency Bankruptcy process.


A year before that, in October 2019, the SC had delivered the verdict on the AGR issue for calculating government dues of telecom companies such as licence fee spectrum usage charges.


After the court rejected pleas by Vodafone Idea, Bharti Airtel Tata Teleservices seeking review of the judgment which widened the definition of AGR by including non-telecom revenues, DoT had in March moved a plea seeking staggered payment over 20 years. DoT had raised the AGR dues to the telcos after the SC crystalised the definition of AGR.


(With inputs from PTI)

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Sebi, DRI probing some Adani Group firms for non-compliance of rules: Govt

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The market regulator customs authorities are investigating Adani Group for non-compliance of rules, the government informed Parliament on Monday.


While the Securities Exchange Board of India (Sebi) is investigating some of the companies “with regard to compliance with Sebi regulations”, the Directorate of Revenue Intelligence (DRI) is probing “certain entities belonging to the Adani Group of Companies under laws administered by it”, Minister of State for Finance Pankaj Chaudhary said in a written reply to a question.





He, however, added that the Enforcement Directorate (ED) was not probing these companies.


Chaudhary said the accounts of three of the six Mauritius-based funds that invested most of their money in Adani Group firms were frozen in 2016 over the issuance of Global Depository Receipts (GDR) by certain listed firms. The funds included Albula Investment Fund, Cresta Fund, APMS Investment Fund. No freeze was, however, ordered for their holding in other firms.


Sources told Business Standard that Sebi was looking into the holding structure of the three funds, while the DRI was investigating Adani Power other group firms in connection with the “over-invoicing” of imported coal power plant equipment.


While the minister cited the Sebi probe, a clarification was earlier issued by the National Securities Depository (NSDL) that these accounts were not frozen in the case of Adani companies.


In a statement later in the day, Adani Group said it had cooperated with Sebi in the past, that it was yet to receive any further communication or information requests.


“We have always been transparent with all our regulators have full faith in them. While we have always been fully compliant with applicable Sebi regulations, we have made full disclosure to Sebi on specific information requests from them in the past. However, we have not received any communication or information requests recently,” the statement said.


“With regard to the DRI matter, it issued a show-cause notice to Adani Power, about five years back. Subsequently, the DRI passed an order in favour of Adani Power, confirming that there is no over-valuation of equipment. The department has approached the tribunal the matter stands sub judice,” it added.


The DRI is currently investigating two separate cases against Adani companies. The one against Adani Power, where it had issued a show-cause notice in 2014, is with the DRI’s adjudicating tribunal. The DRI notice had come after it investigated three Adani Group companies involved in the import of power generation equipment. The DRI had alleged significant overvaluation of the imports. Subsequently, it had issued two more show-cause notices to other group firms, alleging similar overvaluation in their transactions.


The overvaluation of power equipment allows firms to make a case for artificially raising tariffs before the Central Electricity Regulatory Commission or state regulatory commissions. Ultimately, this affects consumers, who have to pay a higher cost for power.


The second case that is against a few Adani companies is for alleged invoicing of coal imports between 2011 2015. The matter went to the Supreme Court, which in January 2020 had stayed the Bombay High Court order quashing the letters rogatary sent by the DRI to its foreign counterparts to get judicial assistance in the matter involving alleged overvaluation of Indonesian coal imports.

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Business Standard has always strived hard to provide up-to-date information commentary on developments that are of interest to you have wider political economic implications for the country the world. Your encouragement constant feedback on how to improve our offering have only made our resolve commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed updated with credible news, authoritative views incisive commentary on topical issues of relevance.

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Masks recommended inside schools for anyone over age of 2: American Academy of Pediatrics

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The American Academy of Pediatrics updated its guidance for the upcoming school year on Monday, now recommending that anyone above the age of 2 wear masks inside schools to protect against the spread of the coronavirus, “regardless of vaccination status.” 

The decision comes as COVID-19 cases are climbing across the U.S. due to the highly transmissible Delta variant.  

“We need to prioritize getting children back into schools alongside their friends their teachers — we all play a role in making sure it happens safely,” Sonja O’Leary, the chair of the AAP Council on School Health, said in a statement. “The pandemic has taken a heartbreaking toll on children, it’s not just their education that has suffered but their mental, emotional physical health. 

Kindergarten students participate in a classroom activity on the first day of in-person learning at Maurice Sendak Elementary School in Los Angeles, Calif., on April 13. (AP)

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“Combining layers of protection that include vaccinations, masking clean hands hygiene will make in-person learning safe possible for everyone,” she added. 

The AAP says its new guidance regarding wearing masks in schools applies to students, teachers staff. 

It said it recommended universal masking “because a significant portion of the student population is not yet eligible for vaccines, masking is proven to reduce transmission of the virus to protect those who are not vaccinated.” 

“Many schools will not have a system to monitor vaccine status of students, teachers staff, some communities overall have low vaccination uptake where the virus may be circulating more prominently,” it added. 

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Amongst other recommendations, the AAP is advising that “adequate timely COVID-19 testing resources must be available accessible” that “strategies should be revised adapted depending on the level of viral transmission test positivity rate throughout the community schools.” 

The Centers for Disease Control Prevention, in its own guidance issued earlier this month, says it “recommends schools maintain at least 3 feet of physical distance between students within classrooms, combined with indoor mask wearing by people who are not fully vaccinated, to reduce transmission risk.” 

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