Showing posts with label hdfc ergo. Show all posts
Showing posts with label hdfc ergo. Show all posts

Wednesday, March 4, 2015

Government, NPCI differ over insurance for RuPay cardholders

Differences have emerged between the government and the National Payment Corporation of India (NPCI), the issuer of RuPay debit card that is given free with every bank account opened under the Pradhan Mantri Jan-Dhan Yojana, over the insurance cover on the inactive cards.



NPCI is of the view that any cardholder who has not swiped the debit card even once in 45 days should not be entitled to insurance cover, while the government says that any such condition defeats the purpose of the national mission for financial inclusion.

Officials told ET that NPCI has argued that imposition of this condition will prompt the cardholders to be active users of RuPay, which competes with established players like Visa and Mastercard. It has proposed that if the government wants to ex tend the duration of swipe to 90 days or 180 days, it should be willing to pay a part of premium expenses that are currently borne by NPCI.

Currently, private insurer HDFC Ergo provides personal accident cover up to Rs 1 lakh to the RuPay cardholders, only if the card is swiped within 45 days of the incident.

Originally, NPCI had called for a tender with a clause mandating a swipe within 45 days, but later it issued a fresh tender, seeking bids for insurance cover for various durations. It called for bids that would cover personal accident when the swipe is within 45 days, 90 days and 180 days of the incident. The bid ding, which closed last week, invited tenders for the next fiscal and only one of the durations will be accepted in consultation with the government.

We have conveyed to the government that we will pay premiums, only if there is a swipe once in 45 days. However, if the government desires to extend it to 90 days or 180 days, it should pay the difference in the premium between 45 days and 90 days or 180 days, whichever period it chooses," said AP Hota, MD and CEO of NPCI.

As a late entrant in the card business, NPCI feels that the condition to swipe the card within the stipulated time will help establish it as a prominent player, particularly since big banks already have tie-ups with its rivals Visa and Mastercard.

The company has called for bids for all cardholders, which are estimated at 20 crore. The cover will include death and permanent disability due to accident. The claim has to be intimidated within 90 days of incident and settled within 10 days of receiving all documents.

Wednesday, September 3, 2014

Jan Dhan Yojana: Clarity awaited on insurance

So far, more than 25 million bank accounts have been opened under the Jan Dhan Yojana and all these individuals will be eligible for life covers of Rs 30,000 by LIC

 It might take time to offer life and accident insurance covers under the Pradhan Mantri Jan Dhan Yojana to those opening bank accounts under the scheme, as various issues in this regard are yet to be resolved.

Under the scheme, which seeks to open 75 million accounts by January 26, 2015, an accident insurance cover of Rs 1 lakh is provided with every RuPay debit card offered by the National Payments Corporation of India (NPCI).

NPCI officials said HDFC Ergo General Insurance would provide the accident cover under the scheme. This will cover accidental deaths, provided the debit card is swiped within 45 days of its issuance and is in an active state.

HDFC Ergo did not respond to a mail seeking details of the cover.

There is also a proposal for an additional accident cover of Rs 1 lakh for opening bank accounts within a stipulated period. While general insurance executives said state-owned general insurers would provide this, no official announcement or communication has been sent by the finance ministry to the companies concerned.

“Though this proposal was discussed in meetings with the finance ministry, it hasn’t issued any letter on when it would be launched and whether it would be completely free for customers,” said a senior insurance executive.

Sources said the general insurers selected for these covers were yet to receive any official communication from the ministry saying they had been selected for this and would have to make payments during receipt of claims.

While debit cards and insurance covers (at least a Rs 1-lakh accident cover) will be provided to all accountholders under this scheme, insurance officials say this might not be done immediately. An official said as the volumes were huge, they would be provided the complete kit within the next few weeks.

Further, the life insurance cover of Rs 30,000 is still being worked out, in terms of the premium collection, amount and the mode of payment.

Life Insurance Corporation of India (LIC), which will offer the cover to all individuals who open bank accounts under the financial inclusion scheme by January 26, 2015, has held a series of meetings with finance ministry officials on the collection of premia and administration of the scheme. A decision on the premium amount and the mechanism to pay claims is still awaited; a clarification is expected in the next three days.

So far, more than 25 million bank accounts have been opened under the Jan Dhan Yojana and all these individuals will be eligible for life covers of Rs 30,000 by LIC.

There have been talks of a minimal payment for this scheme by individuals. Also, the claim settlements could be through the Aam Aadmi Bima Yojana (AAMY), a social security scheme administered by LIC.

A life insurance cover wasn’t part of the Jan Dhan Yojana announced in Prime Minister Narendra Modi’s Independence Day address; it was announced on August 28, when the scheme was officially launched.

The scheme is expected to boost insurance penetration in India. Insurance penetration (premia, as percentage of gross domestic product, fell to 3.9 per cent in 2013-14, compared with four per cent in 2012-13, according to a Swiss Re sigma study). On the life insurance front, insurance penetration in India was 3.1 per cent; for non-life insurance, it was 0.8 per cent.

Monday, September 1, 2014

Jan Dhan Yojana: Government loads up RuPay with Rs 30K LIC cover plus Rs 1 lakh accident insurance

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RuPay cardholders will have dual insurance covers, with the government roping in the Life Insurance Corporation of India a day before unveiling its financial inclusion programme Pradhan Mantri Jan Dhan Yojana.

LIC, the country's largest financial institution, will offer a life cover of Rs 30,000 while HDFC Ergo will provide a Rs 1-lakh personal accident cover to RuPay cardholders.

The massive financial inclusion project to be launched across India on Thursday will give unbanked customers RuPay debit card, launched by the National Payments Corporation of India (NPCI), along with free insurance cover and new bank account.

NPCI had entered into a three-year agreement with private general insurance HDFC Ergo and a similar agreement will be signed with LIC.

Senior officials said the government had decided to improvise the scheme by providing additional insurance cover. The government approached LIC after first picking the state-owned general insurance company New India Assurance for providing additional cover of Rs 1 lakh.

"After a day-long meeting with senior officials from government-owned banks, NPCI, LIC and government-owned general insurance companies on Wednesday evening, LIC was asked to provide additional insurance cover to RuPay cardholders," said a finance ministry official, who did not wish to be named.

LIC will provide unconditional cover to RuPay cardholders. HDFC Ergo will provide cover to the cardholders in case of death or permanent disability. As per the agreement between HDFC Ergo and NPCI, a claim will be disposed only if the card is active. A card will be considered active if the cardholder has swiped it within 45 days of making a claim. The NPCI is in talks with HDFC Ergo to improvise the scheme so that the claim can be made if the card was swiped within the preceding 90 days.

The NPCI has issued 23 million cards, and it is estimated that 150 million new bank accounts will be opened and as many new cards will be issued in the unbanked areas by March 2016, with the NPCI paying the premium instead of the cardholder.

The Jan Dhan Yojana aims to cover 60% of the country's population that does not have access to formal banking services. Under the scheme, every household will be provided one bank account within a year.

Wednesday, August 27, 2014

HDFC Ergo to offer insurance cover to RuPay cardholders for 3 years

 According to the terms, HDFC Ergo would provide an insurance cover of Rs 1 lakh to all RuPay cardholders which can be claimed in case of death or permanent disability.

General insurance company HDFC Ergo has won the mandate to provide insurance cover to all RuPay cardholders, a move which will benefit the insurance company with the government ready to implement the financial inclusion agenda. The Reserve Bank of India-promoted National Payments Corporation of India (NPCI), a company which provides the technology backbone for most payments in India as well as offers the RuPay card, has given the contract to HDFC Ergo for a period of three years.

According to the terms, HDFC Ergo would provide an insurance cover of Rs 1 lakh to all RuPay cardholders which can be claimed in case of death or permanent disability.

AP Hota, CEO and MD of NPCI, confirmed that the company has tied up with HDFC Ergo for the Rs 1 lakh insurance cover. However, in an email response to ET, a spokesperson for HDFC Ergo, said, "We won't be participating for this story."

The company has issued 2.3 crore cards, and it is estimated that 15 crore new bank accounts would be opened and as many new cards would be issued in the unbanked areas by March 2016, and the premium will be paid by NPCI, and not the cardholder. Bank officials, who did not wish to be identified, said that NPCI would be paying a premium of Rs 1 per card. "We are in the process of simplifying the claims procedure and also making customers more aware of their procedure to make claims," said Hota.

However, the insurance company will consider the claim only if the card is active. A card would be considered active if the cardholder has swiped it within 45 days of making a claim. NPCI is in talks with HDFC Ergo to improvise a scheme wherein the claim could be made if it had been swiped 90 days before.

The Narendra Modi-led government had announced on August 15 a massive financial inclusion plan of opening bank accounts and providing insurance cover. On Thursday, the financial inclusion  plan of opening bank accounts and providing insurance cover. On Thursday, the financial inclusion programme called Jan Dhan Yojana will be launched in 75 centres, covering 600 districts and 60,000 villages.

It is estimated that 60% of country's population does not have access to formal banking services.

The Jan Dhan Yojana aims to provide one bank account for every household in a year. Since each new account-holder will also be given the RuPay card, this will increase the customer base of HDFC Ergo.