Seven Cover Reviews of the Best Travel Trailer Covers Sold on the Internet and Retail Stores

Usually an outdoor enthusiasts begins to show interest in a travel trailer when they feel that they have outgrown the “sleeping in the outdoors or tent” phase and are ready to enjoy the luxuries of home and yet still have that feeling of living & camping outside by the ocean or lake or in the mountains or desert. Purchasing a travel trailer is an investment that the RV owner hopes will last for many years and numerous excursions. Travel trailers can and will last for many years, sometimes decades. The interior will keep its looks as long as it is protected from sunlight exposure. If an RV is left uncovered the sun’s UV rays will beat down on the camper and fade the interior upholstery, curtains, blinds, carpets, and bedding. The exterior will show its age a great deal faster than the interior. In only a matter of years a travel trailer that is left unprotected from the weather, will exhibit quick and steady exterior damage when the decals fade, crack, spilt and eventually wear off. The plastic window and door seals will turn gray to black in just a year. The welded seams that connect the sides will expand and contract with every snow fall because freezing/melting cycle that occurs when the snow melts on the roof crevices but remain in the crevice, then re-freezes in the tiny, microscopic crevices. These seams will expand inevitably with the freeze cycle that causes a widening of the connecting seams. This constant cycle of water freezing, melting and re-freezing will eventually cause problems with the roof which results in very costly repairs.

The easiest way to prevent the aging process on your travel trailer is to cover it with the best RV cover for the area in which the travel trailer will be stored and for the time in which you will be storing your camping trailer. With so many RV covers on the market how are you going to be able to find the cover that you need?

For the most part, all of the deluxe RV storage covers discussed in this article are sold on the Internet (as well as Walmart, Sears, and Cabelas) and are basically made of the same material (polypropylene) with few differences. Advertised as deluxe winter snow covers these travel trailer RV covers, (Expedition, ADCO, PolyPro 3, Camco and CoverKing) are generally made of triple-layered breathable non-woven polypropylene. The roof/top of the cover is made to accommodate the AC on the roof and is usually large enough to extend over the sides to protect the awning. At the joining seams where the roofing top meets the single layer of polypropylene sides there are vent flaps that allow the cover “to breathe”. These vents prevent wind friction and moisture buildup that would cause mold and mildew to develop. The sides have several long zippered entry panels that will allow you access to your travel trailer during the storage period. The entire cover is usually secured with an integrated tie-down strap system with adjustable click-close buckles and tension panel flaps in the front and back of the travel trailer that reduce cover stress when tightening or loosening the straps on the cover. This gives the RV cover a semi-custom fit. The major differences between all of these winter snow covers comes in the price and the length of the warranty of the product.

Winter Covers for Travel Trailers 20-33 ft Cost & Warranty

Expedition by Eevelle Cost: $205 – $321 Warranty: 3 years

ADCO Designer made with Tyvek Cost: $262 – $365 Warranty: 2 years

Poly Pro 3 by Classic Accessories Cost: $273 – $341 Warranty: 3 years

Camco Ultraguard Cost: $262 – $415 Warranty: 2 years

CoverKing 600 Denier Presidium Cost: $375 – $575 Warranty: Repair for 1yr

When a travel trailer is stored through the summer in the extreme Southeast and Southwest, the cover must be made from an extremely rugged durable woven material. Travel trailers that are in the sun year-round must have a cover with ultimate UV protection. Winter snow covers (like the Expedition, PolyPro 3, Camco Ultraguard, CoverKing Presidium & the Tyvek ADCO cover) disintegrate within a few short months if they are used to protect the RV through the summer. The non-woven fabric cannot stand up to the intense UV rays in this area of the United States. There are two RV covers made of woven material. The first cover that is made with the newest technology in UV block protection is called the PermaPro RV cover made by Classic Accessories. This RV cover is backed by the newest technology in extra strength UV block protection. The PermaPro cover is made of a light weight extra strength ripstop fabric that is tear resistant with nylon reinforcements in the material. The fabric resembles that used in parachutes and athletic wear. This water-repellent fabric repels rain and snow to make it an all season protective RV cover. This travel trailer cover ranges in cost from $375 – $505 and is backed by a four-year warranty.

The Goldline RV cover sold by Eevelle has long been recognized as the best RV cover by customers and dealers alike. The Goldline RV covers are designed to outperform every other RV cover in all the critical categories of RV protection- strength, durability, water repellency, etc. The extra strength yet supple Goldline Tru-weave woven fabric can handle the strongest winds and can stand up to the extreme UV rays of the sun as well as being a water-repellent rain & snow semi-custom storage cover. This travel trailer cover ranges in cost from $455 – $578 and is backed by a five-year warranty. The Goldline is also the only RV cover made for small travel trailers (10 – 20 ft.) as well as the extremely large ones (up to 46 ft. long).

PermaPro and Goldline are the only extra strength travel trailer covers that can be used as summer storage covers. Their woven design stands up to the winds that accompany winter and foretell the change of seasons. Both of these covers are truly all season RV covers that will protect the investment you made into your travel trailer as well as all the upcoming vacations & excursions you will take well into the next several years.

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Mandatory Provident Fund

Ideally, retirement means a person retire from their regular career; Enter a new life span to review what they have contributed to their profession through their early and middle adulthood. When a person entering retirement, they must enjoy the rest of their life, the fruitful harvest gain from their previous efforts and pursuing a new goal with their spare leisure time.

The beautiful picture of retirement can only be achieved if you are being protected with a good retirement protection, such as provident funds or personal savings. Without these schemes, I am afraid the retirement will only be a start of a nightmare. In fact, before the implementation of the Mandatory Provident Fund scheme, only about one-third of the work of 3.4 million people have some form of retirement protection.

Contribution from the advancement of education level, numerous breakthrough in the medical treatment, modern technology to combat the natural disasters and so on, Hong Kong's population is living much larger than before, but also getting older in a fast tempo. Nowadays, already ten percent of our population is aged 65 and above. By 2016 the proportion will be 13 percent and one senior citizen in every 5 people by 2035.

Without some way is found of funding the welfare and health needs of the growing population of elderly, a massive burden will fall on the shoulders of the taxable working population. Their wages will be heavily taxed to meet the claims. Without sufficient financial resources, the scarce resources will jeopardize the well medical services and welfare we are enjoying now, something must be done to cope with the predicted situation.

The Pathway to Retirement Protection — Mandatory Provident Fund

The World Bank has outlined a framework of the protection for the elderly, so called 'three pillars of old age protection'. This recommended that old-age programs should protect the old and also promote economic growth. The three pillows recommended by the World Bank are
Mandatory, privately managed, fully funded contribution scheme.
Publicly managed, tax-funded social safety net for the old.

Voluntary personal savings and insurance.

The SAR government is operating a Comprehensive Social Security Assistance Scheme, which provides basic social security to the needy, and after much debt it was decided in 1995 that the Mandatory Provident Fund (MPF) Scheme should be introduced, there was a reasonable argument as to the Best system for Hong Kong. With the introduction of MPF, complemented by personal savings, Hong Kong will have in place all the three pillows for old age protection.

Mandatory Provident Fund Scheme Order requires all employees (irrespective of their status as a temporary staff or part time worker) and self-employed persons to join a MPF scheme under which contributions will be saved for retirement. The ideology is to ensure people are adequately provided for upon reaching retirement age.

Employer and employee each pay 5 percent of an employee's monthly salary into a privately run pension plan. The MPF law gives an employee a range of investment choices under an employer's MPF scheme. Generally speaking, without other circumstances, the member can only collect the lump sum of the MPF benefits when they attain the retirement age of 65.

Problematic MPF?

Mandatory Provident Fund scheme which begins in December 2000, this scheme represents a starting point for coercing individuals to plan for their retirement. Beside helping to provide for the retirement needs of millions of people, the MPF is likely to radically reshape savings habits and investment attributions and it will extend the pension umbrella to the remaining two million employed by about 250,000 small and medium sized companies.

Different retirement protection systems have their advantages and disadvantages. After careful consideration, it is generally accepted that MPF best suits Hong Kong 'needs, but as we know, no system is prefect, MPF is no exception, this controversial policy has drawn many criticisms.

Libertarians claim the system run contrary to the Hong Kong spirit, as individuals and firms are coerced into savings decisions that are better placed to make alone.

Other claim Many workers with high mobility are able to avoid taxation by constantly changing employment and a lack of information about them would make it difficult to capture them in the MPF network.

Many more violations and oppositions have also targeted the MPF, in the following paragraphs; I will divide it into different aspects and analyze these practices and oppositions, so that we can get more detailed picture about this far-reaching policy.

Protection for all?

MPF is adding a pillar for our retirement protection; If it is true, it will consolidate the foundation of an enjoyable retiring life and the retired people are no longer worried living under poverty. In fact, will it really protect all future retired people in Hong Kong? It seems to be the most challenging questions and controversial part of the MPF policy. Will the scheme really protect the elderly, unemployed, housewives and so on? I will divide the question into four parts — high income group, low income group, no income group and young, middle and old aged worker to look for the answer for the above questions.

High income people

Before we consider who will benefit the most from the scheme, we should know what you get out of the scheme depends on what you put in. As a result, low-income workers will enjoy less protection than the higher paid worker.

Many high-income people are working large companies and occupying the middle, high or senior position. Since they are specialized in their relevant profession and they possess some kind of expertise knowledge in their working field, their bargaining power in the labor market are relatively higher, so their companies and organization will provide them many welfare and special allowances in order to lure them Staying in the company. Nearly all of them will enjoy a pleasant retirement even without the implementation of the MPF, since many of them have significant amounts of personal saving, high value property or investment and existing pension fund.

Now the MPF has been implemented, both employers and employees will have to pay a minimum contribution of 5% of relevant income, this group of people seems to be much protected and secured from the policy.

Low-income people

As the points illustrated above, low income workers will enjoy less protection than the higher paid because what you get out of the MPF scheme depends on what you put in.

The greatest untruth of the MPF is that a gross 10 percent deduction from salaries, capped at a maximum income of $ 20,000 a month that can make a meaningful dent in funding old age. This mandatory contribution level of the scheme is a good basis to start with, but it is not enough. People will need to pay more to get a better life in retirement. A simple example will illustrate more about the concept, for example, a young man who starts to pay into an MPF ​​plan at 20 years old with an average income of HK $ 15000 per month. Assuming the investment grows with 5 percent inflation, after 45 years of contributions, he would receive just HK $ 771429, that would leave him just HK $ 4300 per month for the 15 years after retirement, if we assuming he die at age 80 (the average life Expectation in Hong Kong).

We should remember most low-income workers are approaching only around $ 10000 or below per month. After many years of contributions, they would receive just around $ 2000-3000 a month. Also due to their income would berely cover their monthly expenses, they are without personal savings, their retirement may not be funded in a pleasant way, the effectiveness of the MPF scheme may not create a beautiful picture for this group of people.

The MPF scheme not only can not provide an effective retirement protection for them, but also create some difficulties and hardships for them. Some unscrupulous employers are avoiding pay extra for the Mandatory Provident Fund scheme by slashing wages and making their staff become self-employed. Many of these problems came from the catering and construction industries.

Since Hong Kong are still recovering from the 1997 Asia financial turmoil, the most hard hit industries (transports, catering, restaurants, construction, manufacturing) are still struggling, most low income workers are working in these sectors (an estimated 500,000 people are working in The construction and catering industries, which account for about 17 percent of the total work in the SAR). Some employers were 'playing tricks' to avoid their financial responsibility because the MPF is an additional cost for these employers. They only cut staff salaries to save costs rather than taking risks to break the law.

Some restaurant owners treated part of their staff wages as special allowances instead of basic salaries in an attempt to lower the employers' contribution. Others effectively cut salaries by imposing an unpaid holiday arrangement on staff. Some construction firms had modified staff into self-employed contractors to avoid liability. The affected construction workers would have no longer enjoy the benefits of MPF or other staff welfare scheme.

Transport employees are also affected by the scheme. A survey conducted by the Container Transportation Employees General Union members found 86 percent had experienced some reduction in pay and benefits by employers using the MPF as the reason. The cutbacks include reducing pay and benefits such as bonuses, travel allowances and telephone payments, signing new contracts that waive past years of services without compensations. They were forced to register as a business so they have self employed status. Since it is very difficult to find a job in the current climate, so they have to accept the new arrangement reluctantly in order to survive.

All those unscrupulous employers are not only exploiting these low-income workers that are also under the effects of the SAR government to build a fund fund system for Hong Kong.

We can see clearly the long-term benefits are far from the low-income workers, but the immediate negative consequences that they should face now, so there is no doubt why the most opposite voice is coming from this sector.

Protection for Young, Middle and Old aged People

The benefits from MPF not only depend on the salary input, but also depends on the choice of funds. The choice of fund may be greatly influenced by the age of employee and what you can collect after retirement. For example, a young worker can afford to invest more in high risk, higher reward funds because if markets tank, they have a long time to recover. By contrast, an employee close to retirement can not afford to risk short-term volatility taking a chunk out of his capital. Young workers seem to be the most benefit from the MPF scheme, compare with the middle or near retiring aged people. The majority of low income earners in their 40s and 50s have no chance of achieving what pension planners call a minimum replacement rate sufficient to fund a pleasant retirement, for example, a man who works for the next 25 years on the median wage of $ 10000 a Month may get only $ 1700 a month upon retirement, based on commonly quoted return rate of two percent, less than social security assistance for a single person.

Finally, as workers can not take any money back before reaching 65, and there are investment risks involved. The private sector rather than the government will manage the funds. The MPF in no way safeguards every citizen's right to the security of basic provisions in life.

No income group

Many people have criticized the MPF scheme which starts in December 2000, neglects the elderly, unemployed and women particularly housewives, since the MPF requires 'employer' and 'employee' to contribute to the scheme, so the well being of the no income people will not Be guaranteed.

MPF scheme as a compromise package that does not serve the well-being of the most vulnerable. There are now 600,000 people over 65 and in 1996, one quarter of people over 60 were living below the poverty line, with a monthly income of under $ 2500.

Women will also remain stuck in a dependent role under the MPF scheme, less than half of the labor forces coerced by the scheme are women because many are either workers workers or housewives. When they get old, they can only expect to relish on their husband, if they have one or obtain comprehensive social security assistance.

At present, Hong Kong is operating a Comprehensive Social Security Assistance Scheme, which offers basic social security to the needy. With the introduction of MPF, complemented by personal savings and CSSA, Hong Kong will indeed have in place all the three pillars for old age protection. In fact, it is far from saying that the scheme provides an effective retirement protection for all and easily believes the problem of elderly poverty will be eradicated.
Burden for investors in Hong Kong?

Hong Kong acts as a financial center in the world and playing a significant role in the Asia. The implementation of MPF will certainly affect the investors, no matter the multi-national investors, big business entrepreneur, small and medium sized enterprises.

Investors of big business

Big companies in order to recruit the talents from the labor markets, many of them have been offering various welfares for their employees, these including a well-sound pension system. Before the implementation of the MPF systems, many big companies have start selecting their company's MPF provider. For example, Swire Pacific said the process of selecting the company's provider began two years old. As one of the Hong Kong's largest companies, Swire are operating companies, such as Cathay Pacific Airways, hotel, trading, marine and properly-development and employing 25000 employees, for this kind of big companies, it is important to have a provider with a Sound administration system to deliver pension services to all their employees, since employees are the largest assets for these big business operators.

Large companies appeared to be concerned about their employees' statements when choosing a provider, it can reflect large companies seem to support MPF scheme and it come along with their existing pension policy, it seems not to create financial burdens for this kind of companies compare with Small and medium sized companies.

Investors of small and medium sized enterprises (SMEs)

Coming at a time when small and medium firms are struggling back into the black after the financial crisis, it is not surprising that the MPF is off to a shaky start. There is no doubt that the MPF presents an extra financial burden for companies that work on narrow profit margins when these kinds of companies were badly hit by the Asia financial turmoil. Small and medium sized businesses (SMEs) have protested vociferously over the MPF's introduction, insisting they can not afford it with the economy still recovering from recession.

Although MPF will extend the pension umbrella to the two million, employed by about 250,000 small and medium sized companies, the financial burden seems to be unbearable for the investors.

For small business investors, they are reluctance to join the scheme is not just about the financial burden. They also resented the time consumed by MPF decision-making and paper work because many of them were far too busy with the day-to-day business of running the firm to take on extra paper work.

How MPF scheme affects the Hong Kong 'economy?

MPF not only will have far reaching effects on the fund-management industry, service providers, but also the general economy. Since MPF is an investment programs, it will increase the pool of institutional funds invested in the SAR, broadening and deepening the financial markets, promoting their efficiency and theby economic growth, it will bring positive charges for financial market.

On the other hand, some people criticize the MPF scheme will eventually upset the flexibility of Hong Kong because workers can not take any money back before reaching 65 and there are investment risks involved. This compulsory saving scheme, unable an employee who leaves a company can get cash in a lump sum or use it to buy property or whatever and invest in other areas.

Conclusion

Although it is far from saying that MPF provides an effective retirement protection for all and older poverty will be eradicated, it really encourages people to save for their old age. No schemes are perfect, the MPF is no exception, but it is the scheme most suitable for Hong Kong 'needs. Since Hong Kong has a well-established and sound financial services sector. A privately managed retirement system under prudential regulation and oversight is the most effective and secure way offer retirement protection to the work. Also under a free competition environment, it tends to increase efficiency and reduce costs of operating the MPF scheme, which will benefit scheme members extremely.

Nowadays, a large part of the social welfare expenses are spending on the Comprehensive Social Security Assistance (CSSA), in the long run, MPF scheme may reduce the financial burden of CSSA, spare welfare expenses can be spent on other social welfare areas, every Citizens will benefit at large.

The scheme may be viewed with some skepticism at the moment, but after people have a chance to see the plan in action, attitudes towards long term saving and retirement should change. Then retirement could be something to look forward to with pleasure, rather than worry. But one thing should be bear in mind, our government should also take care of the most vulnerable people in our society as the paragraphs mentioned above, provide them with appropriate assistance, especially the low income people. Only with that, Hong Kong will be a better, fairer society for everyone to live in.

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Property Tax – Pros and Cons

Property tax can be the fairest and at the same time the not so fair tax collected by municipalities.

Two of the determining factors of how it can affect what an individual will pay for this type of tax are where you live and a person’s economic condition.

Even though we all can appreciate the good points of owning a home vs. renting, when it comes to property tax, renting is by far the better option. States will collect property tax on the following:

Any additions to the property such as improvements to the land

Land itself

Any structures that are not permanent to the property

The assessment is commonly made by an exclusive county tax collector in each state. An individual’s property and land will be appraised of its value and subsequently mailed as a tax payment notice. This usually is paid through a homeowner’s escrow amount stated on their mortgage.

Many times this can negatively affect a property or land owner as the taxes in a specific state can sometimes double or triple in amount and leave the homeowner unable to afford to pay their taxes, forcing them to sell their property or land.

People on a fixed income such as Senior citizens who have retired, can be greatly affected by the increase of property tax. The value of their homes increase, but at the same time they find themselves unable to pay their taxes because of their reduced income. Unfortunately, property tax doesn’t allow much wiggle room in the event of acts of nature or personal tragedy.

Although 2.3 seems to be the average percentage for property tax, it varies greatly from state to state, making it seem highly unfair for certain states such as New Hampshire, as it is a high 4.9 percent.

It also seem unfair when states like Alabama pay 1.3 percent and yet just a little distance away in neighboring Georgia would be required to pay 2.6 percent, then even more in Florida at a rate of 3.1 percent.

So who determines how the money generated from this income is spent or in some cases wasted? The state legislatures will determine this along with the decision to increase or decrease property tax and how frequent it is collected.

Even though property tax can absolutely help states with income,the amount of property tax to be paid can be a determining factor in one’s decision where to reside to achieve the American Dream of land or home ownership.

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The "Contents Pack-out" Trap and How to Escape It

“Contents Pack-out” is a term used by water and fire restoration contractors, and insurance companies. It is the process in which the contractor sends trucks, boxes and workers to your home. They pack up all of the damaged personal property in your home or business and transport it back to their warehouse. Once the personal property is at the warehouse, the contractor begins the cleaning and restoration process.

Insurance companies do not like to replace personal property. They would rather clean or repair it and give it back to you. That drastically slashes their claims cost, which makes them happy.

I’ve been an insurance adjuster for over 16 years, and in the insurance business for over 35 years. I’ve seen very few instances where seriously damaged personal property can be just cleaned or repaired successfully. Most fires burn or infuse toxic chemicals into personal property, like wood or textiles. Same goes for a flood loss. My personal opinion is that replacement of damaged personal property is better than repair or cleaning.

So, what is the trap?

Insurance adjusters like to swoop in with their favorite approved restoration contractor and do a “pack-out.” But your insurance policy has a limit on Personal Property. All of the money that the insurance adjuster authorizes to have your contents cleaned is paid against the policy limit. So, if the restoration contractor cleans a bunch of your damaged property, but you reject it as damaged, the contractor still gets paid. But you have less money now to replace your damaged personal property.

The trap is that a pack-out can penalize you when you are submitting your insurance claim!

Here’s the Escape Strategy

1. You own the personal property…not the insurance company and not the restoration contractor. It is YOUR DECISION what gets repaired and what gets replaced, not the adjuster.

2. Call in your own restoration contractor for a second opinion. It shouldn’t cost you anything, but even if it did, it would be money well spent.

3. Make sure every single item that gets removed from your home is listed on an inventory sheet.

4. Based upon your contractor’s opinion, negotiate the replacements with the adjuster and settle the claim.

If you have experienced a property loss, whether fire, wind, flood or other, you need to know winning insurance claim strategies. The insurance company will not tell you the claims process, but I will. I will show you how to take control of your insurance claim, and add hundreds or even thousands more dollars to your claim settlement. For more information, go to the website listed below.

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Types and Examples of Larceny

When someone is talking about larceny crimes they are talking about the crimes that are associated with personal property. Property has two different titles, which are personal or real. Personal property is any real property that has been cut from the ground. Personal property can become a real property if it becomes attached to the ground. Real property is any property that is affixed to the ground like an apartment or house. The definition of larceny is liable to definition changes that are determined by severance or attachment. When someone is charged with crimes against property, it means a crime in which the defendant acquires property which belongs to someone else. These can include extortion, receipt of stolen property, larceny, false pretenses, robbery.

If you are charged with larceny it means that you have illegally taken of someone’s property, with the intention of permanently dispossessing the owner of their property. It could be goods or money. There are many different forms of larceny, which can include:

• Petty-this is where the property amounting to a smaller prices is being stolen. For a crime to be considered petty larceny the object stolen has to be less than four hundred dollars. If they are convicted of this crime they will have to pay a fine or do jail time.

• Grand-this is also known as felonious larceny and occurs when the property stolen is more than four hundred dollars. In New York, the amount of the robbery has to be more than one thousand dollars for it to be considered a felony. If you are convicted of this misdemeanor are subjected to time in prison. If the crime committed is a crime of a large magnitude can result in longer prison time. In addition to going to prison, you are also liable for fines related to the crime, court fees, and restitution payments.

Examples of larceny

• Snatching a purse-if the offender uses force to snatch the purse and instills fear in the victim it is known as robbery. If there is no force or fear in the victim then it is larceny.

• Shoplifting-this crime occurs when an individual shoplifts certain items from a store and does not pay for them. It also happens if you switch price tags so you are paying an lesser amount that what the actual value is.

• Embezzlement-this crime is when there is misappropriation of funds from an account that belongs to the victim.

• False check -this is a crime when the person issues bad checks to an owner for acquiring the property.

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Advantages of Bus Travel

Bus is the most popular transport nowadays. Many people choose bus as the best transport for them because of the many advantages they find in it. Others never get on a bus, thinking only of the disadvantages, which are truly a lot. Here I will tell you the reasons why it is better to choose travelling by bus rather than travelling with your car for example.

The good standpoints for travelling by bus

Many people choose bus transport because it is cheap. This is the main reason why when you get on a bus you will see mainly students and old people. The tickets for long destinations are much cheaper than the flight tickets. You can also by a card for every month and travel at reduced fare. This is also a good advantage to choose bus transport, because it saves you money that you can spend on your next vacation.

Another good advantage of bus transport when going on short travels is that bad weather won’t be a problem for the bus driver. If you are planning to go to the nearest village with your bicycle and it starts raining or snowing, you will get wet for sure. If you choose the bus, you can save yourself this uncomfortable situation and it also can save you money because it won’t get you sick. Also if you choose to take a flight and the weather surprises you and a storm comes out, you may be waiting for hours because of delayed flights.

However, this won’t happen if you choose bus travel. In modern buses, you will have an air conditioner, toilet, the bus-hostess will offer you drinks and snacks to make your trip more enjoyable, and there are also at least two TV sets in new travel buses. So you can enjoy your trip watching a movie and having a snack without worrying when will be the next stop for the toilet. Also if you are travelling on a bus for more hours or even days, you can always make new friends there. So, the new social contacts are the other advantage of the bus. And if you have to choose between a plane or bus, remember that you will see much more if you are travelling with a bus. The bus also stops at many places during the travel and in that time, you can have a coffee or a cigarette if you are a smoker. In the plane this could not be done.

Another good advantage of buses is that they reduce the traffic jams in the rush hour in big cities. Imagine that everyone uses cars. The traffic jams will be a lot bigger than they are now. In some countries like India, a bus can gather more than 150 passengers. Imagine that all these people were using their cars instead of bus transport the cities will be crowded.

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The 10 Most Common Mistakes Insurance Agents Make

Problem #1

Prospects have more sales resistance training than agents usually have in sales presentation skill.

Prospect response to insurance agents is designed to get as much information as possible and be in control of the situation. Prospects often mislead insurance agents about their intentions, how much they’ll spend, who makes decisions, etc.

The prospect intent is designed to turn agents into unpaid consultants, lead them on until they have all of the information they need, and often use their quotes to compare with their current agent or a competitor.

When prospects have what they need, they stop returning the agent’s phone calls.

Does this make prospects bad people?

Of course not.

We all use this system for dealing with salespeople…it’s almost second nature.

Why do prospects do this?

It’s simple.

It works.

The stereotype of an agent is not a good image for most of us, and prospects are afraid of being sold something they don’t want. In order to protect themselves, prospects feel they need a way to deal with agents. It is an instinctive reaction to the negative stereotype of agents that causes prospects to put up a defensive wall.

So how do most agents deal with the prospects system of defense? Most play right into it. Many don’t use a systematic approach to selling. They allow the prospect to take total control of the sales process. The agent eagerly:

o gives their knowledge

o makes commitments without getting any in return

o wastes resources on pursuing deals that will never close

o gives quotes to non-prospects who never buy

o misinterpret the ubiquitous “I’ll think it over and get back to you” as a future sale

How do most sales organizations contribute to the problem? Frequently they focus on product knowledge and overlook teaching what circumstances or concepts products fit best with.

The solution: Train agents on a systematic approach to making presentations so they have “a track to run on.” The training should balance both the prospect and agent’s best interest.

Problem #2

Spending too much time with prospects that will never buy.

A manager recently evaluated two of his agents like this: “Gary spends too much time with non-buyers, and gets too involved in non-productive activities. One root cause of this behavior is that he doesn’t ask the tough questions. Amy is strong with prospects, but both she and Gary have lost deals because the competition asks for the business while they give quotes to the prospect.” Why is this true?

Agents don’t ask the hard questions up-front for fear of making their prospects angry, they are afraid they will lose something they don’t have. Most agents think their job is to close everybody.

Over the years sales training has emphasized, “Don’t take NO for an answer.” Insurance agents are taught to be persistent…handle stalls and objections…trial closes…always be closing…and yes, even be manipulative. No wonder prospects need sales resistance to shield themselves!

Prospects realize agents don’t want to hear “NO” and that when they do, they’ll “hang in there” and try to turn “NO” into “YES.” When the poor prospect really means “NO,” s/he has found the easiest way to get rid of a agent is to tell them, “I’ll think it over, and I’ll get back to you.” How many “think it over’s” really turn into business?

The solution: Agents need tools to separate tire-kickers from buyers. They need an approach that obtains support early in the sales cycle. They need to learn the fine art of tactfully qualifying prospects in, not qualifying them out. The top agents learn to ask the hard questions up-front, saving precious resources for real opportunities. “NO” is an acceptable response from a buyer. “Going for the NO” requires a tremendous paradigm shift for most agents, but it can take all the pressure off the agent and increase productivity. This approach allows prospects to feel in control, this then relaxes them, and lets them buy instead of feeling like they are being “sold.”

Problem #3

Agents talk too much.

A manager recently said, “My agents’ listening skills aren’t where they need to be; someone says something and they don’t find out the real reason or intent behind the question, which leaves the prospect feeling like my agents don’t understand them or their issues.

Of course, when we sent them to the College of Product Knowledge, filling them with technical knowledge and then sent them out to make their quotas, we should have expected this result.”

So what’s the problem telling our story? First, people buy for their reason, not the agents reasons, not even their company’s reasons. Second, most companies’ presentations sound the same to the prospect, and when they sound the same, the agent just becomes another agent to the prospect, and then to the prospect, low price becomes the determining factor in getting the business.

The solution: Asking questions is the answer. Teach insurance agents to stop regurgitating to the prospect and start asking questions. Prospects should do at least 70% of the talking on the sales call. The only way this will happen is for the sales rep to ask a lot of questions.

Questions gather information. Ask questions to find out what the prospect’s “pain” is. This is the same thing your family doctor does during an office visit. They ask – they don’t tell you anything until they have made the proper diagnosis.

Problem #4

Weak Agents focus on price.

Price is never the real issue! Agents focus on price because it’s often the first thing the prospect asks about. Yet study after study confirms that quality and services are almost always more important than price. Price is never the main reason for getting and keeping business. People buy our products to either solve a problem they have, or improve something about their current situation or protect against future occurrences.

The solution: Teach agents to be more effective in asking questions and getting to real issues. Once they learn to do this, price will not be the determining factor in making sales.

Problem #5

Product knowledge is over-emphasized and misused. As a result, selling often becomes nothing more than “pitching and presenting.”

Most sales training focuses on product knowledge. studies show that 80% of training dollars spent annually are spent on product knowledge training. Agents, once filled with this product knowledge, are eager to share this information and become a Professional, Unpaid Educator. The focus then becomes totally on product, and not on the prospects problem, which is where it belongs.

The solution: Provide training in the strategy and tactics our agents need to help prospects clearly define their problems and co-build solutions that fit their needs. Product knowledge is important, but how it’s used at each phase of the buying process is the key.

Problem #6

Agents fail to get prospects to reveal budgets up-front. Many insurance agents are uncomfortable talking about money. Discussing money is seen as intrusive, and unpleasant. Many agents avoid talking about money, until the prospect forces the issue. This is one of the five most common weaknesses that agents have.

The solution: Knowing whether there is money upfront will help the insurance agent distinguish between a prospects who is ready to solve a problem from one who is not committed. Comfortably talking about money is a key to management, where resources are evaluated based on bottom line impact. Teach your agents to find out two things about money:

o How much the problem is costing the prospect; in other words the amount at risk.

o How much they’d be willing to invest to solve the problem.

Without a candid discussion about money, the agent is left to make certain assumptions. And we all know what happens when we make assumptions!

Problem #7

Agents fail to get firm commitments from prospects.

Insurance agents are often very willing to jump at the opportunity to do a quote, presentation, etc. This approach is incredibly time-consuming and resource intensive.

How many quotes has your team/distribution sent out over the last twelve months that resulted in nothing? How much does it cost your team/distribution on an annual basis to do quotes that go nowhere?

The solution: Agents must learn what motivates people to buy. They must master the skills required to help prospects become comfortable sharing problems, and they must learn to determine the prospects’ level of commitment to solve these problems before they begin to offer their solutions.

Problem #8

Lack of sufficient prospecting.

A quote from a manager: “They don’t do enough prospecting, even ‘when I use a long stick.'” All professional agents will eventually be faced with a bout of call reluctance. You know the story – they have so much paperwork on their desk they can’t possibly find the time to prospect for new business OR they’re so busy calling on existing customers (who incidentally aren’t buying anything) there’s no way they could add any new appointments. Getting ready to get ready. The BT club (bout to) Sound familiar?

o Over 40% of all veteran sales professionals have experienced bouts of call reluctance severe enough to threaten their career in sales

o And 80% of all new agents who fail within their first year do so because of insufficient prospecting activity.

The Solution: Insurance agents need to develop a realistic activity plan. Monitor the plan weekly and implement effective accountability.

Problem #9

The insurance agent has a strong need for approval.

It’s an easy and common mistake. “I love people, so I’ll be an insurance agent.” You end up with an insurance agent that would rather make “friends” with their prospects than conduct business. While developing relationships are an important part of the selling process, selling is not a place for people to get their emotional needs met. In fact, it’s the opposite: a tough and demanding profession, full of rejection. People who internalize the rejection end up getting out of the profession. Truth is, they should never have gotten in the business. Sales interactions are fundamentally different than social interactions. Successful professionals understand and accept that the bottom line of professionally selling is: MAKING MONEY.

The Solution: Evaluate yourself to determine if you have this need for approval. Managers need to ask pre-hire screening questions that helps to hire stronger people and teach them a system that helps strike the appropriate balance between developing relationships and getting commitments.

Problem #10

Insurance agents don’t treat sales as a profession.

Professionals like doctors, lawyers, engineers, teachers, and CPAs’ all have one thing in common – they attend continuing education to maintain and increase their proficiency. Yet how many insurance agents are continually seeking new ways to increase their skills? Many have the attitude, “I’ve been selling for years, what more can I learn?”

The solution: Top performers in every profession are always looking for ways to sharpen their skills and gain the fine edge that leads to consistent success. Managers need to invest in top performers and help them grow their skills. Ego stunts your growth so managers have to be willing to set their ego aside and be willing to grow, modeling behavior that demonstrates it is more important to the manager to be effective than to be right. We can all learn from each other.

In Summary:

Hiring: Distributions, supervisors and managers must complete, step-by-step, a formal process for profiling, attracting, recruiting, interviewing and hiring top performers. Look to hire goal achievers not goal setters. Most managers hire goal setters and are surprised when agents never achieve their goals. The truth is the agent only had a wish list. Ask the agent when interviewing or coaching to describe goals they set and “how” they achieved the goal. If they didn’t achieve then it was it a goal or only a wish list?

Effective recruiting and hiring is the most important job of any manager. No amount of training, coaching or mentoring will make up for a poor hiring decision. Do it right the first time.

Managing: Implement a sales management process that emphasizes more effective recruiting, hiring, coaching, growing, and developing agents. Most of all quit accepting excuses for poor performance from yourself and your agent, raise your expectations and implement a rigorous accountability process. This starts with your team production-if you are not meeting standards. how can you expect to hold your agents accountable?. In management, you don’t get what you want – you only get what you expect and inspect. Remember, you manage things – you lead people.

Training: Tapes, books and one -day seminars are fine for intellectual learning or external motivation, but if you want to be a better golfer, pianist – or a better sales person, you must practice and develop new skills. Selling is a skill that can be taught, learned, and mastered over time.

Phone scripts and rebuttals are intended to assist in moving your management and sales career forward or allowing you to increase you current volume of business.

Remember these are only meant to be sales tools, they do not work, you have to work them.

The key is to do enough of the right things, enough of the time.

Give success time to happen-and do something today to make it happen!

The clock starts NOW!

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Garage Insurance – Used Car Dealers and Repair Shops Watch Those Symbols

Garage insurance is a much misunderstood policy form. Many professional insurance agents are confused about exactly when to use it and more importantly exactly how. You can use a garage liability policy to protect a used car dealer, often referred to as dealer's insurance, or you can use this same form to protect an automated repair shop or to set up body shop insurance. The trick is to know the symbols. If you own a car dealership or an automotive repair shop and are purchasing insurance for your business, it is advisable that you find an agent who specializes in the garage insurance form to help you with this purchase so you do not end up with the wrong Form and possibly find yourself without coverage after a large loss.

As I mentioned earlier, both types of businesses, auto repair and or body shops and used car dealers both need the garage policy. But exactly what kind of operations are covered in these policies is driven by the symbols shown on the policy. This is very important. If your business is automated repair or body work but your policy is set up with symbols that would apply to a car dealership, you could find yourself without coverage in the event of a liability loss.

So how do you know if you have the correct symbols and then the correct form? Pull out your garage policy and look at the first page. Beside each type of coverage, usually to the left, there will be a least one two digit number between 21 and 31. These symbols will describe what is protected by the coverage shown next to that symbol. Here is a list of the most common symbols and what each one protects:

Symbol 21 Any auto
Symbol 22 All owned autos
Symbol 23 Owned private passenger autos only
Symbol 24 Owned autos other than private passenger
Symbol 25 Owned autos subject to no fault laws
Symbol 26 Owned autos subject to Uninsured Motorists law
Symbol 27 Specifically described autos
Symbol 28 Hired autos only
Symbol 29 Non-Owned autos used in the Garage Business
Symbol 30 Autos Left for Service / Repair / Storage
Symbol 31 Autos on Consignment

As you have probably figured out, if you are an automobile dealer and you have symbol 30 on your policy, you would find yourself without coverage. So why not just put symbol 21 on all coverage? Well, since code 21 is the broadest coverage, you would have to pay for this insurance policy and in some cases you might be purchasing insurance protection that you did not really need.

Take some time to look at your policy carefully and review the symbols for each line of coverage to make sure that they are appropriate for the work you do. If you need help with this process, consult your agent. If you agent does not specialize in businesses needing garage policy, ie dealers insurance and auto repair shop insurance, then find one who does. This protection is just too important to leave up to an agent who is practicing on the job learning on your policies.

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Why Do People Travel?

Can you imagine what is life without traveling? Is it possible? Whatever your reason is, traveling is a part of people’s life. We all travel. The reason behind that is up to you.

There are different reasons why people travels:.

1.) Most People Travel because they want to see their families and friends who live far away. Invitations from families and friends are seldom so you will decide to travel just to see them.

2.) People Travel because they want to see their soul mates. Some people believe that there is only one person for them and if they haven’t had much luck searching in their area, they figured it out that even though there are millions of people around the world, they can still find it in other place.

3.) People travel to seek for work because they want to experience how to work from another place. We must admit that earning money is hard and some people decide to work abroad because they are looking for greener pasture. Other place pays bigger rates than their own place. We may also say that their expertise is not favorable in their own place. Unfortunately, they have to leave their families for awhile for a job opportunities abroad.

4.) People travel because they want to learn others cultures. They want to see the difference between their culture and other cultures. They want to learn others culture because for them traveling is fun while learning. One particular thing about the culture is the food. They want to know how food is prepared and how it is done. Obviously, we all love to eat.

5.) People travel because they are writers. They want to give the readers relevant article to their readers especially when they are making story in that particular place.

6.) People travel because they want to see all beautiful scenery of different countries. Others would want to take pictures because it serves as souvenirs.

7.) When opportunity arise, it is hard to decide whether to leave your family and open a business far away your place. Some businessmen would rather put up business in other place because they want gain and it is more profitable than staying in their place. Business is nothing without profit.

Traveling is not only for rich people. Whether you are poor or in the middle class, you can travel as long as it fits your budget. Some travel for their goals, some travel for fun and relaxation and some travel for experience.

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Insurance Law – An Indian Perspective

INTRODUCTION

"Insurance should be bought to protect you against a calamity that would otherwise be financially devastating."

In simple terms, insurance allows someone who suffers a loss or accident to be compensated for the effects of their misfortune. It lets you protect yourself against everyday risks to your health, home and financial situation.

Insurance in India started without any regulation in the Nineteenth Century. It was a typical story of a colonial epoch: few British insurance companies dominating the market serving mostly large urban centers. After the independence, it took a theatrical turn. Insurance was nationalized. First, the life insurance companies were nationalized in 1956, and then the general insurance business was nationalized in 1972. It was only in 1999 that the private insurance companies had been allowed back into the business of insurance with a maximum of 26% of foreign holding .

"The insurance industry is awful and can be quite intimidating." Insurance is being sold for almost anything and everything you can imagine.

Concepts of insurance have been extended beyond the coverage of tangible asset. Now the risk of losses due to sudden changes in currency exchange rates, political disturbance, negligence and liability for the damages can also be covered.

But if a person thoughtfully invests in insurance for his property prior to any unexpected contingency then he will be suitably compensated for his loss as soon as the amount of damage is ascertained.

The entry of the State Bank of India with its proposal of bank assurance brings a new dynamics in the game. The collective experience of the other countries in Asia has already deregulated their markets and has allowed foreign companies to participate. If the experience of the other countries is any guide, the dominance of the Life Insurance Corporation and the General Insurance Corporation is not going to disappear any time soon.
The aim of all insurance is to compensate the owner against loss arising from a variety of risks, which he anticipates, to his life, property and business. Insurance is primarily of two types: life insurance and general insurance. General insurance means Fire, Marine and Miscellaneous insurance which includes insurance against burglary or theft, fidelity guarantee, insurance for employer's liability, and insurance of motor vehicles, livestock and crops.

LIFE INSURANCE IN INDIA

"Life insurance is the heartfelt love letter ever written.

It calms down the crying of a hungry baby at night. It relieves the heart of a bereaved widow.

It is the comforting whisper in the dark silent hours of the night. "

Life insurance made its debut in India well over 100 years ago. Its salient features are not as widely understood in our country as they bought to be. There is no statistical definition of life insurance, but it has been defined as a contract of insurance wheree the insured agreements to pay certain sums called premiums, at specified time, and in consideration thereof the insurer agreed to pay certain sums of money on certain condition Sand in specified way upon happening of a particular event contingent upon the duration of human life.

Life insurance is superior to other forms of savings!

"There is no death. Life Insurance exalts life and defeats death.

It is the premium we pay for the freedom of living after death. "

Savings through life insurance guarantee full protection against risk of death of the saver. In life insurance, on death, the full sum secured is payable (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.

The essential features of life insurance are a) it is a contract relating to human life, which b) provides for payment of lump-sum amount, and c) the amount is paid after the expiration of certain period or on the death of the secured . The very purpose and object of the assured in taking policies from life insurance companies is to safeguard the interest of his dependents viz., Wife and children as the case may be, in the even of premature death of the secured as a result of the happening In any contingency. A life insurance policy is also generally accepted as security for even a commercial loan.

NON-LIFE INSURANCE

"Every asset has a value and the business of general insurance is related to the protection of economic value of assets."

Non-life insurance means insurance other than life insurance such as fire, marine, accident, medical, motor vehicle and household insurance. Assets would have been created through the efforts of owner, which can be in the form of building, vehicles, machinery and other tangible properties. Since tangible property has a physical shape and consistency, it is subject to many risks ranging from fire, allied perils to theft and robbery.
Few of the General Insurance policies are:

Property Insurance: The home is most valued possession. The policy is designed to cover the various risks under a single policy. It provides protection for property and interest of the insured and family.

Health Insurance: It provides cover, which takes care of medical expenses following hospitalization from sudden illness or accident.
Personal Accident Insurance: This insurance policy provides compensation for loss of life or injury (partial or permanent) caused by an accident. This includes reimbursements of cost of treatment and the use of hospital facilities for the treatment.

Travel Insurance: The policy covers the insured against various eventualities while traveling abroad. It covers the insured against personal accident, medical expenses and repatriation, loss of checked baggage, passport etc.

Liability Insurance: This policy indemnifies the Directors or Officers or other professionals against loss arising from claims made against them by reason of any wrongful act in their Official capacity.

Motor Insurance: Motor Vehicles Act states that every motor vehicle plying on the road has to be insured, with at least Liability only policy. There are two types of policy one covering the act of liability, while other covers insurers all liability and damage caused to one's vehicles.

JOURNEY FROM AN INFANT TO ADOLESCENCE!

Historical Perspective

The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered more risky for coverage.

The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to the Triton (Tital) Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British . Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies.

Insurance regulation form began in India with the passing of the Life Insurance Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during 20's and 30's desecrated insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. The insurance business grows at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and provincial societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization. This was in conformity with the Government's chosen path of State lead planning and development.

The (non-life) insurance business continued to prosper with the private sector till 1972. Their operations were restricted to organized trade and industry in large cities. The general insurance industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and grouped into four companies – National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company. These were subsidiaries of the General Insurance Company (GIC).

The life insurance industry was nationalized under the Life Insurance Corporation (LIC) Act of India. In some ways, the LIC has become very flourishing. Regardless of being a monopoly, it has some 60-70 million policyholders. Given that the Indian middle-class is around 250-300 million, the LIC has managed to capture some 30 odd percent of it. Around 48% of the customers of the LIC are from rural and semi-urban areas. This probably would not have happened to the charter of the LIC not specifically set out the goal of serving the rural areas. A high saving rate in India is one of the exogenous factors that have helped the LIC to grow rapidly in recent years. Despite the saving rate being high in India (compared with other countries with a similar level of development), Indians display high degree of risk aversion. Thus, nearly half of the investments are in physical assets (like property and gold). Around twenty three percent are in (low yielding but safe) bank deposits. In addition, some 1.3 percent of the GDP are in life insurance related savings vehicles. This figure has doubled between 1985 and 1995.

A World perspective – Life Insurance in India

In many countries, insurance has been a form of savings. In many developed countries, a significant fraction of domestic saving is in the form of donation insurance plans. This is not surprising. The prominence of some developing countries is more surprising. For example, South Africa features at the number two spot. India is nestled between Chile and Italy. This is even more surprising given the levels of economic development in Chile and Italy. Thus, we can conclude that there is an insurance culture in India since a low per capita income. This promises well for future growth. Specifically, when the income level improvements, insurance (especially life) is likely to grow rapidly.

INSURANCE SECTOR REFORM:

Committee Reports: One Known, One Anonymous!

Although Indian markets were privatized and opened up to foreign companies in a number of sectors in 1991, insurance remained out of bounds on both counts. The government wanted to proceed with caution. With pressure from the opposition, the government (at the time, governed by the Congress Party) decided to set up a committee headed by Mr. RN Malhotra (the then Governor of the Reserve Bank of India).

Malhotra Committee

Liberalization of the Indian insurance market was filed in a report released in 1994 by the Malhotra Committee, indicating that the market should be opened to private-sector competition, and eventually, foreign private-sector competition. It also investigated the level of satisfaction of the customers of the LIC. Inquisitively, the level of customer satisfaction appeared to be high.

In 1993, Malhotra Committee – chaired by former Finance Secretary and RBI Governor RN Malhotra – was formed to evaluate the Indian insurance industry and recommend its future course. The Malhotra committee was set up with the aim of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the needs of the economy keeping in mind the structural changes currently occurring and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for Similar reforms. In 1994, the committee submitted the report and some of the key recommendations included:

O Structure

Government bet in the insurance Companies to be bought down to 50%. Government should take over the holdings of GIC and its affiliates so that these affiliates can act as independent corporations. All the insurance companies should be given greater freedom to operate.
Competition

Private Companies with a minimum paid up capital of Rs.1 billion should be allowed to enter the sector. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state.

O Regulatory Body

The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance – a part of the Finance Ministry- should be made Independent.

O Investments

Compulsory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its affiliates are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time).

O Customer Service

LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. The committee emphasized that in order to improve the customer services and increase the coverage of insurance policies, industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new competitors could ruin the public confidence in the industry. Here, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores.

The committee felt the need to provide greater automation to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body – The Insurance Regulatory and Development Authority.

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has meticulously stuck to its schedule of framing regulations and registering the private sector insurance companies.

Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken at the same time to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of enterprises for attending training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products.

The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity lid for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent.

The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 12 life insurance and 8 general insurance companies have been registered. A host of private insurance companies operating in both life and non-life segments have started selling their insurance policies since 2001

Mukherjee Committee

Immediately after the publication of the Malhotra Committee Report, a new committee, Mukherjee Committee was set up to make concrete plans for the requirements of the newly formed insurance companies. Recommendations of the Mukherjee Committee were never disclosed to the public. But, from the information that filtered out it became clear that the committee recommended the inclusion of certain ratios in insurance company balance sheets to ensure transparency in accounting. But the Finance Minister owed to it and it was argued by him, probably on the advice of some of the potential competitors, that it could affect the prospects of a developing insurance company.

LAW COMMISSION OF INDIA ON REVISION OF THE INSURANCE ACT 1938 – 190th Law Commission Report

The Law Commission on 16th June 2003 released a Consultation Paper on the Revision of the Insurance Act, 1938. The previous exercise to amend the Insurance Act, 1938 was amended in 1999 at the time of enactment of the Insurance Regulatory Development Authority Act, 1999 IRDA Act).

The Commission undertook the present exercise in the context of the changed policy that has permitted private insurance companies both in the life and non-life sectors. A need has been felt to toughen the regulatory mechanism even while streamlining the existing legislation with a view to removing portions that have become superfluous as a consequence of the recent changes.

Among the major areas of changes, the Consultation paper suggested the following:

A. Merging of the provisions of the IRDA Act with the Insurance Act to avoid multiplicity of legislations;

B. Delegation of redundant and transitory provisions in the Insurance Act, 1938;

C. Amendments reflect the modified policy of permitting private insurance companies and strengthening the regulatory mechanism;

D. Providing for stringent norms regarding maintenance of 'solvency margin' and investments by both public sector and private sector insurance companies;

E. Providing for a full-fledged grievance redressal mechanism that includes:

O The constitution of Grievance Redressal Authorizations (GRAs) comprising one judicial and two technical members to deal with complaints / claims of policyholders against insurers (the GRAs are expected to replace the present system of insurer appointed Ombudsman);

O Appointment of adjudicating officers by the IRDA to determine and levy penalies on defaulting insurers, insurance intermediaries and insurance agents;

O Providing for an appeal against the decisions of the IRDA, GRAs and adjudicating officers to an Insurance Appellate Tribunal (IAT) concluding a judge (sitting or retired) of the Supreme Court / Chief Justice of a High Court as presiding officer and two other members Having sufficient experience in insurance matters;

O Providing for a statutory appeal to the Supreme Court against the decisions of the IAT.

LIFE & NON-LIFE INSURANCE – Development and Growth!

The year 2006 turned out to be a momentous year for the insurance sector as regulator the Insurance Regulatory Development Authority Act, laid the foundation for free pricing general insurance from 2007, while many companies announced plans to attack into the sector.

Both domestic and foreign players robustly pursued their long-pending demand for increasing the FDI limit from 26 per cent to 49 per cent and towards the fag end of the year, the Government sent the Comprehensive Insurance Bill to Group of Ministers for consideration amid strong reservation From Left parties. The Bill is likely to be taken up in the Budget session of Parliament.

The infiltration rates of health and other non-life insurances in India are well below the international level. These facts indicate immunity growth potential of the insurance sector. The hike in FDI limit to 49 per cent was proposed by the Government last year. This has not been operationalized as legislative changes are required for such hike. Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have tipped into the Indian market and 21 private companies have been granted licenses.

The involvement of the private insurers in various industry segments has increased on account of both their capturing a part of the business which was earlier underwritten by the public sector insurers and also creating additional business boulevards. To this effect, the public sector insurers have been unable to draw upon their inherent strengths to capture additional premium. Of the growth in premium in 2004-05, 66.27 per cent has been captured by the private insurers despite having 20 per cent market share.

The life insurance industry recorded a premium income of Rs.82854.80 crore during the financial year 2004-05 as against Rs.66653.75 crore in the previous financial year, recording a growth of 24.31 per cent. The contribution of first year premium, single premium and renewal premium to the total premium was Rs.15881.33 crore (19.16 per cent); Rs.10336.30 crore (12.47 per cent); And Rs.56637.16 crore (68.36 per cent), respectively. In the year 2000-01, when the industry was opened up to the private players, the life insurance premium was Rs.34,898.48 crore which constituted of Rs. 6996.95 crore of first year premium, Rs. 25191.07 crore of renewal premium and Rs. 2740.45 crore of single premium. Post opening up, single premium had declined from Rs.9, 194.07 crore in the year 2001-02 to Rs.5674.14 crore in 2002-03 with the withdrawal of the guaranteed return policies. Although it went up marginally in 2003-04 to Rs.5936.50 crore (4.62 per cent growth) 2004-05, however, witnessed a significant shift with the single premium income rising to Rs. 10336.30 crore showing 74.11 per cent growth over 2003-04.

The size of life insurance market increased on the strength of growth in the economy and concomitant increase in per capita income. This resulted in a favorable growth in total premium both for LIC (18.25 per cent) and to the new insurers (147.65 per cent) in 2004-05. The higher growth for the new insurers is to be viewed in the context of a low base in 2003- 04. However, the new insurers have improved their market share from 4.68 in 2003-04 to 9.33 in 2004-05.

The segment wise break up of fire, marine and miscellaneous segments in case of the public sector insurers was Rs.2411.38 crore, Rs.982.99 crore and Rs.10578.59 crore, ie, a growth of (-) 1.43 per cent, 1.81 per cent And 6.58 per cent. The public sector insurers reported growth in Motor and Health segments (9 and 24 per cent). These segments accounted for 45 and 10 per cent of the business underwritten by the public sector insurers. Fire and "Others" accounted for 17.26 and 11 per cent of the premium underwritten. Aviation, Liability, "Others" and Fire recorded negative growth of 29, 21, 3.58 and 1.43 per cent. In no other country that opened at the same time as India have foreign companies been able to grab a 22 per cent market share in the life segment and about 20 per cent in the general insurance segment. The share of foreign insurers in other competitive Asian markets is not more than 5 to 10 per cent.

The life insurance sector grew new premium at a rate not seen before while the general insurance sector grew at a faster rate. Two new players entered into life insurance – Shriram Life and Bharti Axa Life – taking the total number of life players to 16. There was one new entrant to the non-life sector in the form of a standard health insurance company – Star Health and Allied Insurance, taking the non-life players to 14.

A large number of companies, mostly nationalized banks (about 14) such as Bank of India and Punjab National Bank, have announced plans to enter the insurance sector and some of them have also formed joint ventures.

The proposed change in FDI cap is part of the comprehensive amendments to insurance laws – The Insurance Act of 1999, LIC Act, 1956 and IRDA Act, 1999. After the proposed amendments in the insurance laws LIC would be able to maintain reserves while insurance companies Would be able to raise resources other than equity.

About 14 banks are in queue to enter insurance sector and the year 2006 saw several joint venture announcements while others scout partners. Bank of India has teamed up with Union Bank and Japanese insurance major Dai-ichi Mutual Life while PNB tied up with Vijaya Bank and Principal for foraying into life insurance. Allaabad Bank, Karnataka Bank, Indian Overseas Bank, Dabur Investment Corporation and Sompo Japan Insurance Inc have tied up for forming a non-life insurance company while Bank of Maharashtra has tied up with Shriram Group and South Africa's Sanlam group for non-life insurance venture .

CONCLUSION

It seems cynical that the LIC and the GIC will wither and die within the next decade or two. The IRDA has taken "at a snail's pace" approach. It has been very cautious in granting licenses. It has set up fairly strict standards for all aspects of the insurance business (with the probable exception of the disclosure requirements). The regulators always walk a fine line. Too many regulations kill the motivation of the newcomers; Too relaxed regulations may admit failure and fraud that led to nationalization in the first place. India is not unique among the developing countries where the insurance business has been opened up to foreign competitors.

The insurance business is at a critical stage in India. Over the next couple of decades we are likely to witness high growth in the insurance sector for two reasons namely; Financial deregulation always speeds up the development of the insurance sector and growth in per capita GDP also helps the insurance business to grow.

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