Tag Archive | IRDA

Irda Bans Credit Default Insurance

Credit Insurance Plans have been put into a complete ban by IRDA as it was being practiced rampantly by some non-life insurers. Credit Insurance is a kind of cover or guarantee to the lender against payment default by borrowers. IRDA has ordered all general insurers to stop selling credit insurance plans until any further detailed notice is issued by them in this regard.

Since only a smallish number of loans carry credit risk protection, the decision is unlikely to increase the total credit risk of banks. The Authority has also asked for details of total exposure of the insurer under the credit insurance plans issued by them to the banks offering credit facility to the debtors. The credit insurance that is being marketed by the several insurers is better termed as credit default insurance. Its basically a security cover which provides protection to the borrower of a loan against the inability to repay the loan.

A recent case of credit insurance cover which resulted in a claim is that of the state-owned insurer Oriental Insurance Company selling such a cover to Paramount Airlines. The insurer provided cover to the airlines lenders from different branches to the tune of INR 200 crores. Several state-owned lenders have an exposure to the company, which along with other troubled airlines are trying to restructure its debt.

Recently, some scam also came into limelight wherein unscrupulous brokers were conniving with borrowers. The broker armed with a letter from a international reinsurer saying it is willing to provide reinsurance underwriting support, along with the borrower would approach an insurance company for credit insurance cover. Reinsurance support is similar to loan syndication where deep-pocketed underwriters share the credit risk. When there used to be a claim, the insurance company discovered there were problems with the technicalities in the contract which allowed the international reinsurer to escape liability and the local insurer was left with the claim.

When compared, credit insurance is quite similar to credit default swaps which earlier brought down the international insurer AIG. Get more info and also compare insurance quotes.

E-MBA in Finance (Banking & Insurance)

A large number of B schools across the country offer a wide range of management programs for entrants like e-empowered Management & Business Administration, e-empowered Management & Business Administration in Finance covering Banking and Insurance i.e. e-MBA in Finance (Banking and Insurance), Post Graduate Diploma in Management with e-Business, Masters in Management Studies (MMS), MHRDM / MFM / MMM / MIM, Masters of Business Administration with specializations in marketing, finance, personnel, systems and operations, Advanced Diploma in Pharmaceutical Business Management (ADPBM), and Post Graduate Diploma in Foreign Trade (PGDFT). E-MBA Finance with banking and insurance is a professional program targeted at fresh graduates of any discipline as well as executives and professionals who are looking to grow further in their chosen field.

This distinguished course done through a reputed B school may cover a range of topics such as central banking, commercial banking, investment banking, cooperative banking, principles of management, accounts and finance for managers, business environment, ERP, managing personnel, production and operations management, marketing management, managerial economics and quantitative techniques for managers. Also, entrepreneurship, strategies for management, principles of banking, international banking management, information technology in banking, regulations and compliances for banking sector, risk and treasury management, security analysis, bank portfolio management, project management, business laws used in banking, research methodology, business ethics, corporate governance and international trade for aspirants in the banking sector. There are similar distinctions covered for the field of Insurance as well such as accounts and finance for managers, insurance business environment, managerial economics, insurance and risk management, life and non-life insurance, management in insurance companies, business communication, insurance marketing, and reinsurance. Some of the leading B schools have exceptional courses for MBA Finance in view of the fact that banking and insurance are the two fastest growing segments in the financial sector of the country today.

While one may find many B schools that have courses which are dedicated to only Banking or Insurance, it is advisable to enroll for a dual specialization for its many benefits. Seeing that these two segments of the financial sector do work hand in hand, it is best for any aspirant to know the internal working of both fields. It is advisable to seek admissions at B schools that focus on meeting international standards such as that set by the IRDA in London. This initiative can open career doors to 150 countries from across the world for you.

With such exclusively planned courses like e-MBA Finance in Banking and Insurance available, not only aspiring graduates, but also a large number of executives from the finance field are seeking admissions in well-known B schools of the country. In fact, there has been a substantial growth in admissions since the introduction of these courses and the many colleges and institutes are already bringing into being a fleet of business leaders, managers and top class entrepreneurs.