While others were selling, LIC bought and earned Rs.10 K Cr.

Source: ET

In the game of stock picking, the largest local investor, LIC has been a contrarian. It's a bet that has paid off so far in the current bull run.
LIC's mantra is simple: buy shares of operationally sound companies that are caught in unfavourable business cycle and trading at a lower multiple. Based on the latest stock holdings, the state-owned insurer has gained almost Rs 10,000 crore in the past four quarters on back of its contrarian calls on scrips like BHEL and Axis Bank.

In both stocks, LIC raised its stake nearly 4% since December 2013 when several brokerages gave 'sell' call and even three months ago many were bearish about the stocks. "The biggest ability of LIC is to relate the current valuation and current business cycle of the operationally sound companies. When they find valuation of a stock is discounting current business cycle excessively, LIC buys the stock," said G Chokkalingam, Founder, Equinomics Research. "What works in favour of LIC is the duration of holding period for a stock. Being an insurance company, it can hold stock for 8-10 years. However, mutual funds do not have such flexibility as they are under pressure to outperform the benchmark index on a quarterly basis," he said.
The point LIC started buying BHEL, three out of four analysts covering the stock came out with 'sell' reports. Their reasons: a depleted order book and an

Jeevan Rakshak Crosses 1 Million Mark!

Cyclone Hudhud: LIC appoints nodal officers to step up services in Odisha, AP

Courtesy: Firstpost

The country's largest life insurer, Life Insurance Corporation of India, has appointed nodal officers in cyclone-devastated Andhra Pradesh and Odisha for stepping up its services in the region, including expediting settlement claims.

LIC has eased the procedure for settlement of claims on the lives of the victims of cyclone Hudhud in Andhra Pradesh and Odisha, the company said in a statement.

These concessions and relaxations are in the nature of simplified procedure for death and disability claim settlement, loss of policy document and claim settlement on the lives of missing persons, it said.
LIC has appointed Nodal Officers in the affected states for coordinating and expediting settlement claims, it said.

More than 30 people lost their lives while several others were rendered homeless after cyclone Hudhud made landfall last Tuesday. Prime Minister Narendra Modi had announced Rs 1,000 crore towards taking up immediate relief works.

LIC gets Rs. 11,500cr in I-T refunds, policy holders to benefit

Courtesy : The Hindu

Life Insurance Corporation (LIC) has received more than Rs. 11,500 crore in income tax refunds and a big chunk of the amount would be passed on to policyholders, an official said.

“We received I-T refunds in two tranches aggregating to more than Rs. 11,500 crore, after winning a dispute with the I-T department at the Income Tax Appellate Tribunal (ITAT),” an LIC official, who wished not to be named, told PTI here today, adding that this refund happens to be the largest which the company has received so far.

This could not be ascertained with LIC Chairman S.K. Roy.

A text message sent to him also remained unanswered.

In its order dated April 3, 2013, ITAT Mumbai had delivered a judgment in favour of LIC with respect to assessment years 2007-08, 2008-09 and 2009-10, the official said.

As a result of the above ITAT judgment, the LIC received a refund of Rs. 4,190.19 crore for assessment years (AY) 2007-08 and 2009-10 on December 31, 2013. A refund for AY 2008-09 worth Rs. 7,500 crore has been received by the LIC recently, the official said.

As per Section 26 of the LIC Act of 1956, 95 per cent of the surplus coming from I-T refunds ought to go to its policyholders, while the remaining 5 per cent has to be paid to the government in the form of dividend, after arriving at actuarial valuation at the

LIC investment value jumps 45% in 1 year, beats indices

Courtesy: Financial Express

"Since most of the surplus gets distributed among policyholders,
rise in investment return will benefit policyholders"

LIC policyholders may gear up for higher returns on their investment. The Life Insurance Corporation, the largest domestic institutional investor, has seen its portfolio of stocks outperform the two benchmark indices and even the average return generated by large-cap equity funds over the last one year as its investment value has jumped by 45 per cent.
This is despite the government reportedly pushing the insurer to subscribe to overpriced issues of state-owned entities. The government has also, at times, forced it to sell stakes in companies in order to provide stability to the rupee, when foreign investors were pulling out of the markets, leading to the rupee falling against the dollar.
As per nseinfobase.com, developed and compiled by Prime Database, LIC, as on the quarter ended June 2014, owns over 1 per cent stake in 316 listed entities and the market value of all such

LIC eases claims settlement rules for Jammu and Kashmir flood victims

Source: ET

State-run insurer LIC has relaxed claim settlement procedure for those affected in floods in Jammu and Kashmir and a special help desk has been set up for expeditious claim processing.

LIC has extended concessions and relaxations to claimants with respect to settlement of death and disability benefit claims, the largest insurance company said in a statement.

"These concessions are in the nature of simplified death claim settlement, proof of death or missing, loss of policy document etc, similar to concessions and relaxations extended to the victims of floods and landslides in Uttarakhand in June 2013," it said.

In addition, for policyholders residing in the flood affected areas, LIC has extended waiver of interest on the overdue premium, it said.

LIC has set up special help desk at Srinagar divisional office and Northern zonal office at New Delhi to facilitate expeditious settlement of claims.

LIC investment to cross Rs 2.5 lakh crore in FY'15

Source: ET

Country's largest insurer LIC has lined up over Rs 55,000 crore for investment in the equity market in the current fiscal, a part of which will be used for picking up stakes in PSUs during the disinvestment process.

"We will invest a total of Rs 55,000 crore or even more in the equity market in the current fiscal," LIC Chairman SK Roy told PTI.

Asked how much LIC has been earmarked for the upcoming disinvestment, Roy said that Rs 55,000 crore "covers all" type of investments.

LIC had picked up stocks worth Rs 51,000 crore last fiscal and investments were made across sectors.

The public sector insurer has been a key investor in the disinvestment programme of the government.

The government recently gave go ahead to disinvestment of its part stakes in ONGC, CIL and NHPC, which together may earn Rs 43,000 crore to the exchequer. It is also planning to sell 5 per cent stake in SAIL and 10 per cent each in RINL and HAL in the current fiscal.

Roy also informed LIC investment in the bond market may touch Rs 2.5 lakh crore in the fiscal ending March 2015.

In the current fiscal, the life insurer has

LIC tops list of Million Dollar Round Table in 2014

Source : BusinessStandard

Life Insurance Corporation of India (LIC) has topped the company ranking list of the Million Dollar Round Table (MDRT) in 2014. LIC leads the company ranking list with 6730 MDRT members.

Founded in 1927, the Million Dollar Round Table (MDRT), The Premier Association of Financial Professionals, is an international, independent association of more than 42,000 of the world's leading life insurance and financial services professionals from more than 470 companies in 71 countries.

Apart from the basic membership, MDRT has two levels-- Court of Table (COT) and Top of Table (TOT). MDRT's Top of the Table is an exclusive forum for the world's most successful life insurance and financial services professionals.

It has now been decided by LIC to encourage more agents to join this esteemed group and aim to achieve 13000 members in this calendar year.

To become a member of MDRT in 2014, an agent is

Marketing, not FDI limit, important: Irda chairman

Source: BusinessStandard

Insurance Regulatory and Development Authority (Irda) chairman TS Vijayan on Wednesday said the percentage of foreign direct investment (FDI) in the insurance sector was not as much relevant in the Indian context as the marketing of the products and the need for professionals who could drive the industry on a higher growth trajectory.

“FDI in insurance is being debated much more prominently than the similar proposals in strategic sectors like defence as if bringing capital is going to solve all the problems faced by the industry,” Vijayan said at the convocation ceremony of the Institute of Insurance and Risk Management (IIRM) here.

The Irda chief’s comments come a day ahead of the meeting of select committee of Parliament on the Insurance Laws (Amendments) Bill, 2008, which seeks to raise the FDI limit in the sector to 49 per cent from the present 26 per cent.

On August 14, the Rajya Sabha adopted a resolution to send the Bill to the select committee after the Congress-led Opposition demanded for the same.

 “It is the purpose of capital that is important and not the capital itself. Some even hold the view that we don’t need capital at all. For instance, the Government of India gave Rs 5 crore capital to the Life Insurance Corporation for the purpose of collecting dividend,” he remarked.

However, he said the Indian insurance sector was

Best Indian Brands 2014: 'LIC has been a financial guardian angel'

Source: ET

Ajay Singh says, 

"The reason to get life insurance is to have someone take care of financial needs of your family if something goes wrong. Nobody does it better than LIC"

I didn't even consider any private insurance brands ...it had to be only Life Insurance Corporation. It's like fill it, shut it and forget it. When you are investing in life, you would look for a life partner rather than somebody you are flirting with. It's always long term and that's why LIC.

I bought my first policy when I was 26, just four years into my first job. It's not that there were no options but it was an easy choice to make. The biggest reason to get life insurance is to have someone take care of the financial needs of your family if something goes wrong. And I don't think anybody does it better than LIC. I've also bought policies for my wife and 10 year-old daughter.

This year, I am planning to have a policy for my son who will soon turn two. What works best for LIC is the trust that the brand enjoys. It may be not be aggressive in terms of communications or may not have the best of customer service or maybe viewed by the new generation as a 'desi' brand, but that doesn't matter.

It's not a T20 but a Test match. The very thought that your money is safe with LIC is so comforting that any deficiency in service can be ignored. And what's wrong with being desi?

(The writer Ajay Singh works in an HR firm.)

"LIC" - the largest profit earner among financial institutions and banks in India

LIC does not have a concept of profit in its business and its profits are known as Surplus Fund Transfer which is distributed among unit holders (95 per cent) and the government (5 per cent)

Source: Indian Express

LIC has managed to post 

a profit of Rs 26,384 crore!

Life Insurance Corporation, India’s largest financial institution, has increased its presence in the equity market with a 60 per cent rise in its investments in equities in FY14.

The corporation bought stocks worth Rs 53,373 crore during 2013-14 as against Rs 33,205 crore in fiscal 2012-13, making it the largest domestic investor in Indian markets, said an official. It has booked a profit Rs 21,257 crore from the capital market in the year ended March 2014 in spite of a challenging environment.

This is the second year in succession that LIC made bumper profits from the market as the corporation had realised a profit of Rs 21,000 crore in the previous fiscal.

However, LIC was unable to take on the combined might of foreign institutional investors in terms of inflows. During FY14, FIIs pumped in a net amount of

Know Your LIC...! (Profile 2014)

LIC Profile 2014

LIC to invest Rs2.25 trillion in markets this fiscal

Full Article: livemint

State-owned Life Insurance Corp. of India (LIC), the country’s biggest insurer, expects to invest at least `2.25 trillion in the financial markets in the year to next March, seeking to tap a potential upturn in the economy after the presentation of the national budget on 10 July.

The expected investment by LIC marks an increase of `15,000 crore, or 6.6%, in the money the insurer spent buying securities in the last fiscal year. The figure may be revised higher, said two senior officials at LIC, the single largest investor in India’s financial markets.

Most of the `2.25 trillion of estimated investment by LIC could be allocated to government securities because equity markets have been trading high for several months and the insurer typically is used to selling shares on market highs and buying stocks on lows.

In fiscal 2014, LIC earned `90,123.76 crore in first-year premiums. That makes up three-quarters of the total first-year premium collected by the life insurance industry, in which LIC competes against 23 private-sector firms.

Of about 6,000 listed firms, LIC held stakes in at least 361 at the end of March. Only 957 firms have disclosed their June-end shareholding pattern so far; LIC has a holding in 125 of them.
To read Full Article: livemint

LIC's Rs 1,280 crore rescue act for 3 banks

Source: DNA

A clutch of public sector banks are knocking at the doors of state-owned insurance giant Life Insurance Corporation (LIC) to raise funds.

At least three banks -- Central Bank of India, United Bank of India and Bank of Maharashtra -- will make a preferential allotment to LIC to raise funds urgently needed for expansion. Banks need more money to fund their growth and meet regulatory requirements.

Under preferential allotment, shares are allotted to a preferred institution without going to the open market.

Finance minister Arun Jaitley had said during

Who wants to privatise LIC?

Finance Minister sought opinions from several sectors. While asking about Banks, Vice Chairman of Kotak Mahindra Bank adviced Government to sell LIC into shares to mobilise funds.
How will a man react, if he is sane and capable of thinking logically?
"I asked about banks, not about insurance industry or Government's needs of funds" might be the right answer.
"You take care of your institution - Kotak Mahindra Bank, we can very well take care of the Government" would have been the reply, if the FM had some self respect.
"First you administer properly your insurance arm - Kotak Mahindra Old Mutual Life Insurance Co. When you become better than LIC, come and advice us", would have been the apt reply, if he had some conscious.
But, he had sought opinion from LIC whether it can be listed.
What does it mean?
Allahabad High Court ordered IRDA to scrutinise all policies of SBI Life and if required wind up the company.
If LIC chairman or somebody else asks the Government to wind up SBI Life, will the Government write to SBI Life?
But, the Government is seriously seeking opinion from LIC, whether it can be listed.
That means...
It is the intention of the Government to privatise LIC. They knew how will LICians react. So, they are creating an illusion, as if, somebody is suggesting something and they are considering.
LIC Chairman aptly replied.
We also need to reply in the form of movements involving general public, against the Government, when it tries to proceed.
Be prepared...

= = = = = = = = = = = = = = = = = = = = = = = = = = = = =
LIC Chairman replies to Finance Minister
Source: Indian Express
State-run Life Insurance Corporation (LIC) is against diluting its present character and listing the entity on the stock exchanges and has

IRDA proposes ban on surrender recycling

Sources:
Business Standard

Times of India

IRDA Draft Circular 

Replacement of a life insurance policy means an intermediary, agent or an insurer selling a new policy within six months of surrender of the earlier policy, entailing modification in the terms resulting in reduction of the benefit amount of the existing policy.

Irda asked insurers not to withhold any part of the surrender value payable to the policyholder towards the cost of a new policy.

In cases where it is unavoidable, the regulator has asked the insurer to document the entire process and submit to the policyholder a document highlighting the loss he will suffer and the reason for recommending the new policy.

A policyholder who is not properly guided by the existing life insurance company has the right to exercise the restoration of the existing policy within seven days from the receipt of the new one.

The policy that was replaced and restituted is entitled to all such benefits that is otherwise eligible had the policy been not replaced for taking a new policy. A policyholder who has exercised the restitution of the replaced policy is entitled to total refund of premiums, without any recoveries, on returning the new policy at his option.

How to shrink Rs50,000 to Rs248 - Learn from SBI Life!

Source: liveMint

Allahabad High Court asked Irda to scrutinise SBI Life’s policies, and if found guilty of a breach, to wind up its business.

It also held Irda remiss in its duties of upholding consumer interest. “Irda completely failed in exercise of its statutory duty in allowing the unilateral amendments in the policy on a mere advice of a switch over option to all the policy holders. …an advice of Irda could not be the basis of change in the policy, which is a contract unless written consent of policyholder was obtained. Irda failed to carry out its statutory duties in allowing such unilateral change by mere information without insisting upon written consent of the policy holder,” the judgement noted (edited excerpt).

As a scientist at the National Botanical Research Institute in Lucknow, Virendra Pal Kapoor, now 72, spent years developing eco-friendly, toxin-free, herbal products. Ironically, as an investor, he contaminated his own portfolio by making the cardinal mistake of buying insurance when not needed. To be fair to the scientist, he was taken in by the advice given by his life insurance agent, whom he met in the premises of his bank.

Kapoor, now retired, is a happy customer of State Bank of India and has built a relationship of trust over decades with the bank. “I met this agent at my bank, and since SBI is government owned, I thought that the companies that he represented (SBI Mutual Fund and SBI Life Insurance Co. Ltd) would also be backed by the government,”said Kapoor.

In 2007, at the age of 64-plus, Kapoor bought a unit-linked insurance plan (Ulip) on the advice of his agent. According to Kapoor, his agent, Vinod Kumar Harjai, who is an independent financial adviser (IFA), suggested that he buy SBI Life Unit Plus-II single-premium Ulip for a term of five years. The rationale offered was that the Ulip would not only help Kapoor invest in equities just like mutual funds, but also

LIC likely to invest Rs 3.5-lakh cr in FY15

Source: BusinessStandard

 

Life Insurance Corporation of India is reportedly looking to invest up to Rs 3.5 lakh crore in FY15 in debt and equities. Of this, it is expected that Rs 40,000-50,000 crore will be put into the equities market.
The government-owned giant had booked profits of Rs 21,000 crore in the stock market during 2013-14.

Sources said a plan of investing Rs 3.2-3.5 lakh crore in 2014-15 will be discussed by the board of directors in a few days. In FY14, it had invested Rs 2.25 lakh crore, including about Rs 40,000 crore in the equity market.
Apart from the regular investment

LIC's total investments touch Rs 14.8-lakh crore

Source: Business Standard

India's largest insurer to invest Rs 2.25-lakh crore in FY14

 

The total investments of Life Insurance Corporation of India (LIC) at the end of FY13 stood at Rs 14.86 lakh crore. According to LIC's annual report for 2012-13, the country's largest insurer had Rs 14.84 lakh crore worth of investments in India and Rs 2,408.61 crore worth of investments abroad.

In FY14, LIC plans to invest Rs 2.25 lakh crore in government securities, bonds, infrastructure, debenture and equity, of which 15-20 per cent would be in equity.

The insurer had booked Rs 21,000 crore profit from sale of equities and churning of the  portfolio. According to an earlier presentation by LIC to a Parliament standing committee on finance, total investments at the end of March 31, 2012 was Rs 13.49 lakh crore.

Usha Sangwan, managing director of LIC, had recently said the insurer has planned to invest Rs 40,000 crore in equity this financial year. "We have already invested Rs 33,000 crore. We have also booked profits of Rs 14,000 crore, since there has been a continuous churn in the portfolio," she had said.

With respect to the investment in infrastructure and the social sector, LIC invested Rs 10,995.33 crore in power, Rs 4,121.74 crore in housing, Rs 35.72 crore in water supply and sewerage, and Rs 5,012.13 crore in other infrastructure in FY13.

The insurer plans to have 12 per cent growth in new business premium this financial year. LIC Chairman S K Roy had earlier said that although it had budgeted for 12 per cent in first premium growth, the insurer is hopeful of achieving more growth.

LIC most consumer friendly: IRDA

Source: The Times of India
Life Insurance Corporation of India has outdone its peers in the private sector in most parameters used for measuring consumer friendliness. The corporation had fewer lapses, higher claim settlement and no penalties from the regulator.

The claim settlement ratio of LIC was better than that of private life insurers. Its settlement ratio increased to 97.73% in FY13 from 97.42% in the previous year. And the percentage of rejections was only 1.12% compared to 1.30% earlier.

Private insurers reported a dip in settlement ratio to 88.65% from 89.34% in FY12. "Private insurers had repudiated more number of claims when compared to LIC. The percentage of repudiations (by private insurers) was 7.85%, almost unchanged from pervious years 7.82% in FY12," the Insurance Regulatory and Development Authority said in its annual report for FY13 released on Wednesday.

In terms of persistency of business too, LIC scores better with a lapse ratio of only 5.6% as against private life companies which are all in double digits ranging from 17% to 42%. The only exception is HDFC Life Insurance, which has a lapse ratio of 5.6%. IRDA measures lapse ratio as the number of policies lapsed during the year divided by the average of the policies in force at the beginning and end of the year.

The 13-month persistency (policies which are renewed after a year) is the highest for PNB Metlife at 71.22% on a much smaller business. LIC, Max Life Insurance and IDBI Federal Life Insurance have a 13-month persistency of 70%. For other private companies, the ratio ranges from a low of 36% to 69%.

Private insurers scored slightly better was in terms of commission ratio. Private insurers paid out 5.7% of total premium as commission compared to 7.08% for LIC. However, LIC reach was much bigger and it sold more policies to the lower middle class with an average premium per policy of Rs 11,143. Compared to this, the private life insurers generated an average premium of Rs 24,457 per policy - more than double that of LIC.

While agents of private companies managed to sell only an average of three policies in FY13, the average agent of LIC sold 29 policies. In FY13, the insurance regulatory authority imposed penalties on 12 companies, including two public sector non-life insurers, for various reasons. The penalties ranged from Rs 5 lakh to Rs 1.4 crore. However, LIC did not face any penal action.

In the first quarter of FY14 life, insurers have written business of Rs 19,216 crore as against Rs 19,451 crore, recording a 1.2% shrinkage in business. While private insurers registered a 6.87% decline, the state-owned life insurer recorded a growth of 2.92%. LIC, with Rs 14,295 crore of premium from new policies, saw its new business market share rise from 74.29% to 74.39%.

Private insurance companies deny...