Non-life premia to go up
New DelhiThe provisions of the proposed Insurance (Amendment) Bill, currently open in Parliament, seeks to push up non-life premiums by as much as 12.5 per cent.
Senior insurance officials say that formerly in a regulated insurance market, no room was left for intermediaries. However, at present with brokers getting a foothold in the Indian insurance framework, public sector general insurers will have to add on the additional cost of selling through an intermediary to the premiums and unless they do so, they will not be in a position to attain profits and survive in the
competitive market.
Moreover, almost all these PSU insurers are in red as a result of underwriting losses. With fire premia down by 30 per cent and ending of cross subsidisation, the companies have no option but to pass the buck on to the consumers.
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RBI clears way for 3-tier corporate debt revamp plan
MumbaiThe Reserve Bank of India (RBI) has set the stage for the creating a three-tier corporate debt restructuring system (CDR) in the country, which will apply to all multiple banking accounts, syndicates, and consortium accounts with outstanding exposure of Rs 20 crore and above with the banks and financial
institutions (FIs).
The CDR system will comprise of the following: standing forum, empowered group and CDR cell. One of the salient features is that reference to CDR system could be triggered by: (a) any or more of the secured creditor who have minimum 20 per cent share in either working capital or term-finance, or (b) by the
concerned corporate, if supported by a bank or FI having stake as in (a).
The objective of the CDR framework is to ensure timely and transparent mechanism for restructuring corporate debts of viable entities facing problems, outside the purview of Board for Industrial and Financial Restructuring, Debt Recovery Tribunals, and other legal proceedings.
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Number of US jobless at 9-yr high
WashingtonThe number of jobless workers in the US on
unemployment dole is now at a nine-year peak, the government reported on Thursday, providing stark evidence of the toll the year long economic slowdown was taking on the nation's labour markets.
The Labor Department said the number of Americans collecting unemployment benefits rose to 3.18 million in the week ending August 11, the highest level since September 1992, when the country was struggling to emerge from the previous recession.
In addition to those already drawing benefits, the government said the number of newly laid-off workers filing applications for benefits rose by 8,000 last week to 393,000, the highest level since mid-July this year.
Private economists said the worst was yet to come. In recent weeks a number of companies ranging from Ford, the nation's No 2 automaker, to Lucent, the telecommunication equipment giant, and Steelcase, the No 2 office furniture manufacturer have announced large scale lay-offs leading the Dow Jones industrial
average to lose 47.75 points to close at 10,229.15.
Though the unemployment rate remained unchanged at 4.5 per cent in July, economists warned it was likely to rise to 4.6 per cent this month and top 5 per cent by the end of the year as more companies cut workers in the face of sluggish sales.
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