Children For Sale
For as little as Rs 3,000, impoverished parents sell their children to adoption centres and unscrupulous operators in Andhra Pradesh, who in turn earn up to Rs 3 lakh from foster families. A look at the people involved, the law and where the process went wrong.

Amma Turns Red
J. Jayalalitha's hopes for contesting the elections have been dashed with the rejection of her nomination papers. But this does not deter her from stepping up her campaigning efforts for the AIADMK and assuming an aggressive stance.

Past Tense
The muted reaction of the Government to the massacre of the BSF troops raises many questions. A look at the past skirmishes between the BSF and BDR gives an insight into what led to the heightening of tension at the border.

Coming To Life
With the end of state monopoly, private insurance companies are offering wider risk coverage and better customer relations.

Starting Over
It's been three months since nature shook Gujarat, killing over 30,000 and shattering dreams. Despite government promises and generosity of individuals, rehabilitation is still to touch the lives of many. The story in pictures.

BUSINESS: INSURANCE

Private Companies Offer Extra Benefits

Both ICICI Prudential and HDFC Standard Life are offering many such riders-as accident or disability benefit, major surgical assistance benefit and even as protection against critical illness. "Over 70 per cent of the customers have taken policies with at least one additional benefit," says D.M. Satwalekar, CEO, HDFC Standard Life. Especially popular is the critical illness rider which protects the policyholder against financial loss in the event of a terminal illness.

The additional premium for each rider is not fixed. It has wide variations for clients across different risk bands. For the critical illness add-on, the computation challenges the underwriter's skill as it involves a multitude of factors, including mortality records of the policyholder's family and an intimate knowledge of his personal health profile. The task is compounded by the extra requirement of estimating the policyholder's possible income at any point of time in the insured period, and the likely duration of his being bed-ridden. Till recently, the LIC was famously liberal in the medical check-ups while selling life policies. However, the new insurers, besides subjecting clients to detailed medical scrutiny, insist that they fill up detailed declaration forms, with the caveat that a single misdeclaration may lead to dismissal of claims.

The general insurance market, however, is yet to feel the heat of competition due to a combination of reasons. This is so partly because most segments of the general insurance market-like fire and motor-are under strict control of the Tariff Advisory Committee (TAC). There is not much scope, therefore, for launching novel products until the regulator formulates new rules for their pricing. Besides, as compared to life business, the private insurer is completely clueless in general insurance without his own data bank. There are at least the available figures of mortality to guide the insurer of life, but where does one get data about, say, the frequency of failure of turbines in hydroelectric projects?

However, even within these constraints, the Tata AIG has brought a touch of originality with its tailor-made products for the software industry. Notable among them is its Net Advantage Security which covers a large gamut of risks associated with e-commerce. The risks range from liabilities linked with privacy violation to charges of breach of security. "In an era of borderless transactions," says Tata AIG General Insurance CEO Dalip Verma, "the risks can be very large depending on the laws of the country from where the charges originated."

The company has a policy that indemnifies directors and officers of a company against liabilities from errors and omissions in piquant corporate situations-ranging from charge of violation of corporate governance rules or employment practices to sexual harassment complaints. These are complex policies with risks that are difficult to measure. The GIC depends entirely on foreign reinsurers (like Swiss Re, or Munich Re) for pricing and structuring complex insurances. The new players being mostly joint ventures with MNCs, much of their expertise is inhouse.

They are also gearing up for big changes in health insurance (which is non-life insurance), the big change in the offing is the cashless service, which enables the policyholder to receive treatment at the designated hospitals without making any direct payment. The charges are debited from the client's account through the Third Party Administrator (TPA), who manages health insurance against a commission. The account details are likely to be contained in a plastic card issued by the insurer. The IRDA is in the process of licensing the TPAs, with many well-known corporates, including the Apollo Group of Hospitals, on the list of applicants.

IRDA Chairman N. Rangachari says the new entrants currently "are carrying out the needs analysis of the target groups". However, at the root of the needs analysis is the arduous task of obtaining statistical data. The LIC and GIC did not feel such need, bound as they were by a strict tariff regime and a monopoly that guaranteed growth. In a competitive environment, insurance will be governed not by the Finance Ministry mandarins but by the law of big numbers.

MetroScape

Focusing On Art
The brief for participants at
"Exhibit 'A' 2001" organised by the
200-member
Photographers'
Guild of India at the Nehru Centre, Mumbai, was clear—no advertisement and portfolio photos. more...

Looking Glass

Delhi Poster:
One Page Classics

Calcutta Pub:
London Pub

Bangalore & Mumbai Rock Concert:
Bryan Adams

West Bengal Chief Minister Buddhadev Bhattacharya reflected optimism about winning the state election when he spoke to INDIA TODAY Senior Editor Sumit Mitra at the CPI(M) headquarters in Kolkata, minutes before rushing off for campaigning.
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