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CREDIT INSURANCE

CHAPTER 1- INTRODUCTION

Definition of 'Credit Insurance'

Credit insurance is a type of life insurance policy purchased by a borrower that pays off one or more existing debts in the event of a death, disability, or in rarecases, unemployment. Credit insurance is marketed most often as a credit cardfeature, with the monthly cost charging a low percentage of the card's unpaid

balance.

Investopedia explains 'Credit Insurance'

Credit insurance can be a financial lifesaver in the event of certain catastrophes.However, many credit insurance policies are overpriced relative to their benefits,as well as loaded with fine print that can make it hard to collect on. If you feel thatcredit insurance would bring you peace of mind, be sure to read the fine print aswell as compare your quote against a standard term life insurance policy.

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CHAPTER 2:OBJECTIVES OF CREDIT

INSURANCE

The Corporation has set before itself the following

objectives:

1. To encourage and facilitate globalization of India‟s trade.

2. To assist Indian exporters in managing their credit risks by providing timely information on worthiness of the

buyers, bankers and the countries.

3. To protect the Indian exporters against unforeseen losses,

which may arise due to failure of the buyer, bank or

problems faced by the country of the buyer by providing

cost effective credit insurance covers in the form of Policy,

Factoring and Investment Insurance Services comparable to

similar covers available to exporters in other countries.

4. To facilitate availability of adequate bank finance to the

Indian exporters by providing surety insurance covers for

bankers at competitive rates.

5. To achieve improved performance in terms of

profitability, financial and operational efficiency indicators

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and achieve optimum return on investment.

6. To develop world class expertise in credit insurance

among employees and ensure continuous innovation andachieve the highest customer satisfaction by delivering top

quality service.

7. To educate the customers by continuous publicity and

effective marketing.

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CHAPTER3;BENEFITS OF BUYING CREDIT INSURANCE

FROM ICICI

ICICI credit insurance provides policyholders with a wide range of benefits:

Protection from financial loss (client receivables) - non-payment of a debt

owed by a relatively large client, or a chain of “collapses” resulting from

market changes or political events, expose a company to a high risk that

could lead to a loss of profitability (to the point of outright losses) and harm

cash flow. ICICI‟s credit insurance is a first rate financial instrument for

managing the company‟s risks and protecting against them.

Assistance in managing a company’s credit - ICICIhas a variety of

information sources. As a member of a group of global credit insurance

companies, ICICI has access to extensive information from credit insurance

companies in other countries. These companies have information on the

clients in their countries. ICICI policyholders are given access to this

information, thus offering a valuable contribution to the management of the policyholder‟s credit. As a member of the EULER HERMES group, ICICI

has access to the information network of EULER HERMES, the largest

credit insurance company in the world.

Meeting precautionary obligations, managing credit and hedging risks -

using ICICI‟s credit insurance is in line with the legal obligations incumbent

on a company‟s executives. Credit insurance is a first rate financial

instrument for hedging risks.

Leveraging credit insurance for financing needs - ICICI offers

policyholders a joint program between ICIC and Israel‟s large banks and

non-banking financing institutions. The financing institution purchases the

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debt insured by ICICI. The clearest advantages of this program are:

increased financing for the policyholder, comfortable financing terms,

improved financing ratios on the balance sheet (reducing the receivables

line) and the policyholder‟s continued management of collection from his

clients.

Increasing revenues and profitability - credit insurance to certain

countries or clients often contributes to increased sales that would not

necessarily be conducted in the absence of credit insurance. Thus, for

example, ICIC‟s credit insurance to Russia, China and other countries

enables exporters to increase sales to clients in those countries.

Accounting benefits - credit insurance premiums are a tax-deductible

expense, whereas provisions for doubtful debts are not. Credit insurance also

helps in the process for gaining recognition of revenues, as required by

accounting regulations.

Improving the policyholder’s rating - ICICI credit insurance is taken into

account by the rating companies that assess ICICI policyholders, as credit

risk is among the risks that are investigated by the rating companies

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CHAPTER 4 – ADVANTAGES OF CREDIT INSURANCE

Credit insurance provides not only peace of mind to you, but also the following

key benefits:

Catastrophic loss protection: Your receivables are one of your largest and

most at-risk assets. Credit insurance protects against potential bad debt

losses, thus providing a safety net. Click here to see an actual case studyfrom our client portfolio.

Safe sales expansion: Credit insurance allows you to grow your business

without worry. Whether you are trying to expand credit lines with existing

customers, or extend competitive open credit terms to new accounts, using

credit insurance to reduce or eliminate the risk is a great way to safely grow

your business. Click here to see an actual case study from our client

portfolio.

Increased Borrowing: Credit insurance can provide cost effective access to

working capital that can help you grow and avoid cash flow crunches. Your

credit insurance policy can help you maximize working capital availability

from the receivables you pledge to your lender. Most ineligible receivables

(including concentration of receivables with a few accounts and foreign

receivables) can now be included in your borrowing base with your lender.

Click here to see an actual case study from our client portfolio.

Credit Decision support and information on your customers: When you

implement a credit insurance program with Global Commercial Credit, you

are not just buying coverage on your receivables, you are getting a partner in

http://www.gccrisk.com/global-commercial-credit-case-study-catastrophic-loss.php

http://www.gccrisk.com/global-commercial-credit-case-study-sales-expansion.php


http://www.gccrisk.com/global-commercial-credit-case-study-borrowing-enhancement.php

http://www.gccrisk.com/global-commercial-credit-case-study-borrowing-enhancement.php



http://www.gccrisk.com/global-commercial-credit-case-study-catastrophic-loss.php

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credit risk management whose goal is to help you avoid credit losses before

they happen and back you up when they do. Credit insurance can also

provide you with valuable market intelligence on the financial viability of

your customers (buyers), and, in the case of buyers in foreign countries, on

any trading risks peculiar to those countries. Click here to see an actual case

study from our client portfolio.

Allows companies to lower their bad debt reserve:Credit insurance will

allow you to lower your bad debt reserve significantly and manage write-

offs with greater certainty. By reducing the bad debt reserve on this scale,

you will be able to take excess bad debt reserves back into income (by

provisioning significantly less) thus improving earnings, shareholder equity

and financial ratios etc. Credit Insurance premiums are tax deductible

(whereas your bad debt reserve is not).

Helps avoid an unexpected significant impact on your company: For

example, you would have to generate a significant amount of future sales at

$0 profit (beyond your normal sales) to make up for a credit loss.

SETTLEMENTS OF CLAIMS

If you have defaulted on a loan and get a call to 'settle' it for less than the

amount outstanding on the bank's books, don't accept the offer blindly. Such

a 'settlement' can unsettle your credit history and impact your ability to

access loans in the future.

Though you may feel that calls from the bank's recovery unit will end after

the 'settlement', a valid reason for accepting the bank's offer, this comes at a

price, something that most people are not aware about.

http://www.gccrisk.com/global-commercial-credit-case-study-decision-support.php

http://businesstoday.intoday.in/story/banks-to-name-and-shame-guarantors-for-loan-defaulters/1/196561.html






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The offer for one-time settlement, called OTS in banking parlance, comes

when you are unable to pay up and the interest accrued becomes more than

the principal. In the offer, the lender usually demands payment of a part of

the amount due, usually more than the principal.

However, the bank does not tell you that doing this is like admitting that you

lack the ability to pay the entire amount, and that this will be reported to

the credit bureau . The bureau, on its part, will mention the 'settlement' in

your credit report, which means you will have difficulty in accessing loans

in the future.

HOW IS A LOAN 'SETTLED'?

Settling a loan means paying a part of the total amount due as you are unable

to pay in full. This can also be done if there is a dispute between you and the

lender.

"The amount can be negotiated with the lender, but in most cases it is not

less than the principal," says Arun Ramamurthy, co-founder, Credit Sudhaar,

a company that helps debt-trapped people improve their creditworthiness.

After the settlement, the bank writes off the difference between the amount

due and amount paid from its books and reports it as a loss.

Once the loan account has been settled, the bank would stop sending

recovery agents after you.

http://businesstoday.intoday.in/story/p-chidambaram-asks-banks-cut-lending-rates-check-npa-rise/1/196430.html



http://businesstoday.intoday.in/story/pre-payment-charges-for-home-loan-deductible-income-tax-head/1/195325.html






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Though your credit report will not show any amount overdue against your

name, the account status will show 'settled', which means the loan has been

repaid only in part. This is enough to spoil your credit report. When you

approach another bank for a loan, it is highly likely that your application will

be rejected. This is because your credit report says that you have in the past

failed to fully repay a loan.

"The customer may go for settlement on one or more than one credit facility

with the same bank or multiple banks. However, this leaves a trail of poor

credit history at the bureau. The customer will have difficulty in obtaining

further credit from same or other lenders in the market," says Manish Sinha

of HSBC India.

Any loan account overdue by more than 90 days is classified as a non-

performing asset. Banks usually write off loans 180-270 days after the

payment date. The settlement can happen both before and after the write-off.

If a customer avails of the settlement before the write-off, the flag in the

credit report is updated as "settled"; after the write-off, it is updated as "post

write-off settled". Both are considered negative by banks and financial

institutions.

The worst part is that people opting for settlement are not even aware of the

fact that it will ruin their credit report.

"In 95% cases, the process is outsourced to agencies, and people working

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there are themselves not aware that such settlements lead to negative flags in

credit reports," says Ramamurthy.

As a result, a borrower would accept the bank's proposal to settle the account

without asking for removal of the settled flag from the credit report.

CLAIMS PROCESS

How is a life insurance insurance claim settled?

FilingaLifeInsuranceClaim

Claim settlement is one of the most important services that an

insurance company can provide to its customers. Insurance companies

have an obligation to settle claims promptly. You will need to fill a

claim form and contact the financial advisor from whom you bought

your policy. Submit all relevant documents such as original death

certificate and policy bond to your insurer to support your claim. Mostclaims are settled by issuing a cheque within 7 days from the time

they receive the documents. However, if your insurer is unable to deal

with all or any part of your claim, you will be notified in writing.

Types of claims

Maturity Claim - On the date of maturity life insured is required

to send maturity claim / discharge form and

original policy bond well before maturity date to enable timely

settlement. Most companies offer/issue post dated cheques and/ or

make payment through ECS credit on the maturity date.

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Incase of delay in settlement kindly refer to grievance redressal.

Death Claim (including rider claim) - In case of death claim or

rider claim the following procedure should be followed.Follow these four simple steps to file a claim:

1. Claim intimation/notification

The claimant must submit the written intimation as soon as

possible to enable the insurance company to initiate the claim

processing. The claim intimation should consist of basic

information such as policy number, name of the insured, date

of death, cause of death, place of death, name of the

claimant.

The claimant can also get a claim intimation/notification

form from the nearest local branch office of the insurance

company or their insurance advisor/agent. Alternatively,

some insurance companies also provide the facility o

downloading the form from their website.

2. Documents required for claim processing

The claimant will be required to provide a claimant's

statement, original policy document, death certificate, police

FIR and post mortem exam report (for accidental death),

certificate and records from the treating doctor/hospital (for

death due to illness) and advance discharge form for claim

processing. Based on the sum at risk, cause of death and

http://www.lifeinscouncil.org/consumers/ombudsman/grievance-redressal-process




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policy duration, insurance companies may also request some

additional documents.|

3. Submission of required documents for claim processingFor faster claim processing, it is essential that the claimant

submits complete documentation as early as possible. A life

insurer will not be able to take a decision until all the

requirements are complete. Once all relevant documents,

records and forms have been submitted, the life insurer can

take a decision about the claim.

4. Settlement of claim

As per the regulation 8 of the IRDA (Policy holder's Interest)

Regulations, 2002, the insurer is required to settle a claim

within 30 days of receipt of all documents including

clarification sought by the insurer. However, the insurance

company can set a practice of settling the claim even earlier.

If the claim requires further investigation, the insurer has to

complete its procedures within six months from receiving the

written intimation of claim.

Claim intimation

In case a claim arises you should:

Contact the respective life insurance branch office.

Contact your insurance advisor

Call the respective Customer Helpline

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Claim requirements

For Death Claim:

Death Certificate

Original Policy Bond

Claim Forms issued by the insurer along with supporting

documents

For Accidental Disability / Critical Illness Claim:

Copies of Medical Records, Test Reports, Discharge

Summary, Admission Records of hospitals and Laboratories.


Claim Forms along with supporting documents

For Maturity Claims:


Maturity Claim Form

Incase of delay in settlement kindly refer to grievance redressal





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DISADVANTAGES OF CREDIT INSURANCE

Certain accounts will have specific coverage limits assigned, and the limits

may be far less than the amount requested by the creditor,

Policies include annual and per-loss deductibles meaning that credit insurance

is not first dollar loss coverage so the creditor self-insures for a portion of the

risk

Insurance policies often contain exclusions and limitations on coverage

Often, losses under a certain dollar amount are not covered at all

The insurer will likely require detailed periodic reports from the creditor

about the status of customers covered by the policy and failure to comply

with any of the terms of the insurance contract could invalidate the coverage

Credit insurance policies will usually not pay the creditor company if thedebtor asserts that the balance due is in dispute...and customers in serious

financial trouble often claim the balance due is disputed

The narrower the "spread" of risk being submitted to the insurer, the more

difficult it will be to find coverage at an acceptable price.

Credit insurance involves risk sharing, not risk transfer from the creditor to

the insurance company and most insurers decline coverage on companies they

consider high risk. The problem is that these are often the exact customers

that the creditor wants coverage for.

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either automatically be agreed or, in certain circumstances, be negotiated. One

underwriter even allows up to £50,000 cover where a nil credit limit has previously

been provided on poorly rated customers.

SME Policies offering whole ledger blind cover - There are now a whole range of

new policies designed for the low turnover client. These range from simplified on-

line offerings to policies that will offer a reduced degree of indemnity (percentage

covered) for all the buyers in the ledger.

Single account cover for UK or Export - This may not be new but cover on this

basis was restricted and is now far more freely available from a variety of

underwriters.

Open Account cover for emerging markets - Do you need cover for a sale to Sub-

Saharan Africa? For years this was one of the greatest challenges, however, main

stream underwriters are now competing with the specialists in this sector.

Underpinning these changes is the increased sophistication of underwriter

information gathering matched by a buyer‟s awareness that, in the order for their

suppliers to finance their sales they will need credit insurance. Quarterly balance

sheets are no longer a rarity and risk analysts are better trained and equipped to not

only better analyse the information but also to manage their own capacity much

more effectively.

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Features of credit insurance

Credit insurance can help you in case you can‟t pay your debt if you are dealing

with certain types of emergencies. You have a variety of features to choose from

when considering insurance. Policies vary and you can discuss details with the

lender, including the premium amount, whether it can be included in your monthly

loan payment, the length of your coverage and the limits on your benefits.

Consider what you can afford. Don‟t blame your premiums for your inability to

pay.

Premium Starts at Just Rs. 2000/yr. No Medicals upto 75L Cover* Buy Now

Individual Protection

Credit life insurance pays off a portion or your total loan upon death during the

term of coverage. Credit disability, accident or health insurance takes care of

monthly payments over a limited amount of time in case of illness or accident.

Credit involuntary loss of income insurance pays your monthly payments if you

get laid off or lose your job due to no fault of your own. The disability and loss of

income policies pay the creditor for a specific amount of time outlined in the

policy terms, according to the National Association of Insurance Commissioners.

Property and Business

You can also get credit insurance policies not directly related to your ability to

repay your debt. Credit property insurance protects secured loans in case of theft,accident or natural disasters that destroy personal property. Small business owners

consider business or trade credit insurance that insures lines of credit and protects

them from debtors who default on payments or go bankrupt.

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How You Pay

Payments vary on credit insurance. A singe premium method includes both the

original loan amount and the insurance premium in the monthly payment. As the

borrower, you would have a higher monthly loan amount when you decide to

include credit insurance. Creditors might offer the monthly outstanding balance

payments for credit cards, home equity loans or other debts. The credit insurance

premium changes monthly, based on the debt increased over time, if you choose an

open-end account. For closed-end accounts, you have a fixed amount each month

for your credit insurance premium and the amount of debt does not change each

month.

What to Know

Federal regulations protect you in buying or not buying credit insurance. A lender

can‟t deny you credit if you don‟t accept optional credit insurance. However, this

rule does not apply to private mortgage insurance required for most home

purchasers who put less than a 20 percent downpayment on the loan. Loan

companies cannot include credit insurance in your loan without your approval orknowledge, according to the Federal Trade Commission. Ask your lender if the

loan includes any charges for voluntary credit insurance before you sign loan

papers. If you feel pressured by the lender to buy the insurance, and don‟t want it

or remain undecided, seek another lender. Check for further information online

with your state insurance department‟s web site.

Some of the disadvantages of commercial credit insurance include:

Certain accounts will have specific coverage limits assigned, and the limits may be far less

than the amount requested by the creditor,

Policies include annual and per-loss deductibles meaning that credit insurance is not first

dollar loss coverage so the creditor self-insures for a portion of the risk

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Insurance policies often contain exclusions and limitations on coverage

Often, losses under a certain dollar amount are not covered at all

The insurer will likely require detailed periodic reports from the creditor about the status of

customers covered by the policy and failure to comply with any of the terms of the insurance

contract could invalidate the coverage

Credit insurance policies will usually not pay the creditor company if the debtor asserts that

the balance due is in dispute...and customers in serious financial trouble often claim the

balance due is disputed

The narrower the "spread" of risk being submitted to the insurer, the more difficult it will be to

find coverage at an acceptable price.

Credit insurance involves risk sharing, not risk transfer from the creditor to the insurance

company and most insurers decline coverage on companies they consider high risk. The

problem is that these are often the exact customers that the creditor wants coverage for.

EULER HERMES AGAIN NAMED “FASTEST GROWING TRADE CREDIT

INSURANCE COMPANY IN GCC”

25.02.2014

Global Banking and Finance Review named Euler Hermes “Fastest

Growing Credit Insurance Company GCC” in 2014, for the second consecutive

year. The awards honor companies specifically for expertise in the banking andfinance industry, and recognize Euler Hermes for its continuing efforts to deliverhigh quality products and services.

“With over 100 years of experience, Euler Hermes continues to provide customers

with the services and knowledge they need to be able to trade and developsuccessfully,” said Wanda Rich, editor of Global Banking & Finance Review.

“Their ongoing commitment to quality is evidenced by their increasing customerretention and growth.”

Massimo Falcioni, CEO, Euler Hermes GCC, said, “We are honored that Global

Banking and Finance Review has conferred this award to Euler Hermes for thesecond year in a row.

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We also particularly recognized that much of it is due to our customers renewingtheir trust in our services. This award is an inspiring start for 2014 and we willcontinue to focus on delivering tailor-made solutions to protect companies of all

sizes and sectors against payment defaults.”

The judging panel focused on the following criteria:

A global network with risk offices in key markets, countries and regions A comprehensive risk database and worldwide risk platform An extensive range of products tailored to meet customer needs Customer retention

An increase in premium portfolio Global and local services and support Investment in ongoing education and training, delivering highly skilled and

professional staff Financial standing

Euler Hermes established operations in Dubai (U.A.E.) sponsored by AllianceInsurance PSC in 2006 and in cooperation with Allianz Saudi Fransi CooperationInsurance, a joint venture between Allianz Group and Saudi Fransi Bank, in SaudiArabia in 2008. Euler Hermes GCC is part of the Euler Hermes Mediterranean

Countries, Middle East and Africa (MMEA) region, currently employing 600 people and covering 12 countries.

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Objectives

The Corporation has set before itself the following objectives:

1. To encourage and facilitate globalization of India’s trade.

2. To assist Indian exporters in managing their credit risks by

providing timely information on worthiness of the buyers, bankers and

the countries.

3. To protect the Indian exporters against unforeseen losses, which

may arise due to failure of the buyer, bank or problems faced by the

country of the buyer by providing cost effective credit insurancecovers in the form of Policy, Factoring and Investment Insurance

Services comparable to similar covers available to exporters in other

countries.

4. To facilitate availability of adequate bank finance to the Indian

exporters by providing surety insurance covers for bankers at

competitive rates.

5. To achieve improved performance in terms of profitability, financial

and operational efficiency indicators and achieve optimum return oninvestment.

6. To develop world class expertise in credit insurance among

employees and ensure continuous innovation and achieve the highest

customer satisfaction by delivering top quality service.

7. To educate the customers by continuous publicity and effective

marketing.

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are not just buying coverage on your receivables, you are getting a partner incredit risk management whose goal is to help you avoid credit losses beforethey happen and back you up when they do. Credit insurance can also

provide you with valuable market intelligence on the financial viability ofyour customers (buyers), and, in the case of buyers in foreign countries, onany trading risks peculiar to those countries. Click here to see an actual casestudy from our client portfolio.

Allows companies to lower their bad debt reserve:Credit insurance willallow you to lower your bad debt reserve significantly and manage write-offs with greater certainty. By reducing the bad debt reserve on this scale,you will be able to take excess bad debt reserves back into income (by

provisioning significantly less) thus improving earnings, shareholder equityand financial ratios etc. Credit Insurance premiums are tax deductible(whereas your bad debt reserve is not).

Helps avoid an unexpected significant impact on your company: Forexample, you would have to generate a significant amount of future sales at$0 profit (beyond your normal sales) to make up for a credit loss.

SETTLEMENTS OF CLAIMS If you have defaulted on a loan and get a call to 'settle' it for less than the

amount outstanding on the bank's books, don't accept the offer blindly. Sucha 'settlement' can unsettle your credit history and impact your ability toaccess loans in the future.

Though you may feel that calls from the bank's recovery unit will end afterthe 'settlement', a valid reason for accepting the bank's offer, this comes at a price, something that most people are not aware about.

The offer for one-time settlement, called OTS in banking parlance, comeswhen you are unable to pay up and the interest accrued becomes more thanthe principal. In the offer, the lender usually demands payment of a part ofthe amount due, usually more than the principal.

However, the bank does not tell you that doing this is like admitting that you

lack the ability to pay the entire amount, and that this will be reported tothe credit bureau . The bureau, on its part, will mention the 'settlement' inyour credit report, which means you will have difficulty in accessing loansin the future.

HOW IS A LOAN 'SETTLED'?














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Settling a loan means paying a part of the total amount due as you are unableto pay in full. This can also be done if there is a dispute between you and thelender.

"The amount can be negotiated with the lender, but in most cases it is notless than the principal," says Arun Ramamurthy, co-founder, Credit Sudhaar,a company that helps debt-trapped people improve their creditworthiness.

After the settlement, the bank writes off the difference between the amountdue and amount paid from its books and reports it as a loss.

Once the loan account has been settled, the bank would stop sendingrecovery agents after you.

The relationship between the bank and the customer is terminated after this.If the customer is making full payment, the account is closed in the bank's

books. However, in a settlement, the bank writes off the waived amount and books losses. Most banks upload the names of customers whose loans have been written off in their blacklist database," says Manish Sinha, head,customer value management, HSBC India.

In case of dispute over the amount due or late payment fee also, the borrower can arrive at an agreement with the lender to pay a part of the duesand 'settle' the account.

"In such a case, the borrower should negotiate with the bank to clear thedisputed items before paying the amount in full so that the account is notreported as 'settled'. The borrower should also seek a 'no-dues certificate'from the bank," says Amit Bhatia, director and head, assets and business

banking, Deutsche Bank India.

Before settling a disputed loan, borrowers must avail of the chargebackfacility under which the disputed transaction is temporarily reversed in the

borrower's account till the investigation into the dispute is over.

CREDIBILITY CRISIS

While settling the loan will give you respite from recovery agents, it willdamage your credit history. This is because after the paperwork, the lender






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will report the settlement to the credit bureau.

Though your credit report will not show any amount overdue against yourname, the account status will show 'settled', which means the loan has beenrepaid only in part. This is enough to spoil your credit report. When youapproach another bank for a loan, it is highly likely that your application will

be rejected. This is because your credit report says that you have in the pastfailed to fully repay a loan.

"The customer may go for settlement on one or more than one credit facilitywith the same bank or multiple banks. However, this leaves a trail of poorcredit history at the bureau. The customer will have difficulty in obtainingfurther credit from same or other lenders in the market," says Manish Sinhaof HSBC India.

Any loan account overdue by more than 90 days is classified as a non- performing asset. Banks usually write off loans 180-270 days after the payment date. The settlement can happen both before and after the write-off.

If a customer avails of the settlement before the write-off, the flag in thecredit report is updated as "settled"; after the write-off, it is updated as "postwrite-off settled". Both are considered negative by banks and financialinstitutions.

The worst part is that people opting for settlement are not even aware of thefact that it will ruin their credit report.

"In 95% cases, the process is outsourced to agencies, and people workingthere are themselves not aware that such settlements lead to negative flags incredit reports," says Ramamurthy.

As a result, a borrower would accept the bank's proposal to settle the accountwithout asking for removal of the settled flag from the credit report.

Claims Process

How is a life insurance insurance claim settled?FilingaLifeInsuranceClaim

Claim settlement is one of the most important services that an

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insurance company can provide to its customers. Insurance companieshave an obligation to settle claims promptly. You will need to fill aclaim form and contact the financial advisor from whom you boughtyour policy. Submit all relevant documents such as original death

certificate and policy bond to your insurer to support your claim. Mostclaims are settled by issuing a cheque within 7 days from the timethey receive the documents. However, if your insurer is unable to dealwith all or any part of your claim, you will be notified in writing.

Types of claims

Maturity Claim - On the date of maturity life insured is requiredto send maturity claim / discharge form and

original policy bond well before maturity date to enable timely

settlement. Most companies offer/issue post dated cheques and/ ormake payment through ECS credit on the maturity date.Incase of delay in settlement kindly refer to grievance redressal.

Death Claim (including rider claim) - In case of death claim orrider claim the following procedure should be followed.

Follow these four simple steps to file a claim:

1. Claim intimation/notificationThe claimant must submit the written intimation as soon as possible to enable the insurance company to initiate the claim processing. The claim intimation should consist of basicinformation such as policy number, name of the insured, dateof death, cause of death, place of death, name of theclaimant.The claimant can also get a claim intimation/notificationform from the nearest local branch office of the insurancecompany or their insurance advisor/agent. Alternatively,

some insurance companies also provide the facility odownloading the form from their website.

2. Documents required for claim processing

The claimant will be required to provide a claimant'sstatement, original policy document, death certificate, police





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FIR and post mortem exam report (for accidental death),certificate and records from the treating doctor/hospital (fordeath due to illness) and advance discharge form for claim

processing. Based on the sum at risk, cause of death and

policy duration, insurance companies may also request someadditional documents.|

3. Submission of required documents for claim processing

For faster claim processing, it is essential that the claimantsubmits complete documentation as early as possible. A lifeinsurer will not be able to take a decision until all therequirements are complete. Once all relevant documents,records and forms have been submitted, the life insurer cantake a decision about the claim.

4. Settlement of claim

As per the regulation 8 of the IRDA (Policy holder's Interest)Regulations, 2002, the insurer is required to settle a claimwithin 30 days of receipt of all documents includingclarification sought by the insurer. However, the insurancecompany can set a practice of settling the claim even earlier.If the claim requires further investigation, the insurer has tocomplete its procedures within six months from receiving thewritten intimation of claim.

Claim intimation

In case a claim arises you should:

Contact the respective life insurance branch office.

Contact your insurance advisor

Call the respective Customer Helpline

Claim requirementsFor Death Claim:

Death Certificate


Claim Forms issued by the insurer along with supportingdocuments

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BENEFITS OF BUYING CREDIT INSURANCE FROM ICIC

ICIC credit insurance provides policyholders with a wide range of benefits:

Protection from financial loss (client receivables) - non-payment of a debt

owed by a relatively large client, or a chain of “collapses” resulting frommarket changes or political events, expose a company to a high risk thatcould lead to a loss of profitability (to the point of outright losses) and harmcash flow. ICIC‟s credit insurance is a first rate financial instrument for

managing the company‟s risks and protecting against them. Assistance in managing a company’s credit - ICIC has a variety of

information sources. As a member of a group of global credit insurancecompanies, ICIC has access to extensive information from credit insurancecompanies in other countries. These companies have information on the

clients in their countries. ICIC policyholders are given access to thisinformation, thus offering a valuable contribution to the management of the policyholder‟s credit. As a member of the EULER HERMES group, ICIC

has access to the information network of EULER HERMES, the largestcredit insurance company in the world.

Meeting precautionary obligations, managing credit and hedging risks -using ICIC‟s credit insurance is in line with the legal obligations incumbent

on a company‟s executives. Credit insurance is a first rate financial

instrument for hedging risks. Leveraging credit insurance for financing needs - ICIC offers

policyholders a joint program between ICIC and Israel‟s large banks andnon-banking financing institutions. The financing institution purchases thedebt insured by ICIC. The clearest advantages of this program are: increasedfinancing for the policyholder, comfortable financing terms, improvedfinancing ratios on the balance sheet (reducing the receivables line) and the policyholder‟s continued management of collection from his clients.

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Increasing revenues and profitability - credit insurance to certaincountries or clients often contributes to increased sales that would notnecessarily be conducted in the absence of credit insurance. Thus, forexample, ICIC‟s credit insurance to Russia, China and other countries

enables exporters to increase sales to clients in those countries. Accounting benefits - credit insurance premiums are a tax-deductible

expense, whereas provisions for doubtful debts are not. Credit insurance alsohelps in the process for gaining recognition of revenues, as required byaccounting regulations.

Improving the policyholder’s rating - ICIC credit insurance is taken intoaccount by the rating companies that assess ICIC policyholders, as creditrisk is among the risks that are investigated by the rating companies.

CREDIT INSURANCE AFTER THE CREDIT

CRISIS: THE FUTURE IS NOW August 18, 2009

By Ron Doyle

Over two years ago, it was apparent that credit insurance companies were going to face problems

as they abandoned their traditional underwriting guidelines in favour of more aggressive

underwriting. Past credit insurance offers were priced so low that even a modest increase in claims

would result in unacceptable loss ratios. This action alone deteriorated the pool of risk, and, like inthe banking community, the credit insurance industry undervalued the cost of risk.

Then, once losses materialized, underwriters reacted urgently to protect their positions. Many

cancelled large numbers of approved credit limits, increased prices, and applied policy conditions

more rigorously when reviewing claims. Such actions created an adverse perception of the value of

credit insurance by many companies affected.

http://icba-online.com/home/2009/8/18/credit-insurance-after-the-credit-crisis-the-future-is-now.html





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Yet credit insurance remains a valuable tool in managing risk. Credit insurance allows companies to

transfer certain risks to underwriters, and, by improving financing options and supporting increased

sales, credit insurance solutions are evolving to follow more traditional insurance concepts.

Examples:1. Credit insurance coverage should only be used for unforeseen commercial and political risks that

could causeabnormal ly high write-offs against accounts receivable. Routine write-offs are a cost of

doing business and they are within the control of the company – not necessary to insure with credit

insurance policies.

2. By necessity, companies seeking credit insurance may have to include new risk mitigation

strategies into credit practices. It is now apparent that underwriters require more financial information

(from policy holders and their buyers) prior to approving larger exposures, particularly in industries

with a high aggregation of risk.

3. Many current policyholders and potential clients are changing their expectations of the pricing of

credit insurance and the amount of risk they are expected to retain. In the last 5 years, average

premium rates have dropped considerably, in the area of 50%, but this situation is not sustainable.

Premium rates and deductibles are increasing to levels that allow credit insurance policies to be both

effective and still provide good value.

4. Most insurers are modifying their products to meet policyholders’ expectations of reliable

coverage at a reasonable cost. More policyholders are seeking non-cancelable credit limits or

policies with definite criteria for allowing underwriters to cancel or reduce credits limits. If coverage

on a loss is denied, policyholders want easily accessible recourse to arbitration, short of taking an

underwriter to court.

5. Brokers and direct sales agents are providing superior customer service. A policyholder needs to

understand each word in an agreement and how it will be interpreted in a claims situation. A credit

insurance policy needs to be structured to provide optimum coverage at a minimum cost, which

requires earlier and more detailed analysis by brokers.

Credit insurance for accounts receivable continues to be an excellent risk management tool, and

over the next two years, it will continue to improve and change. Specialist credit insurance brokersare also trusted advisors, and the trend for companies to rely on and work in partnership with

insurance brokers will continue.

(Ron Doyle is a founder of Millennium CreditRisk Management – credit and political risk insurance

specialists –www.mcm.ca. ICBA is the world’s largest team of independently -owned, specialist trade

http://www.mcm.ca/

http://www.mcm.ca/

http://www.mcm.ca/

http://www.mcm.ca/

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http://www.mcm.ca/

http://icba-online.com/




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credit insurance brokerages. Partners combine local service with global coordination to provide

credit and political risk insurance solutions for multinational companies.)

Benefits at RCL

Royal Caribbean Cruises Ltd. believes that great vacations begin with greatemployees and we are pleased to offer a robust menu of rewards and benefits.These benefits include cruising privileges aboard our ships around the world, paidtime off, health benefits, wellness plans and several retirement plans.

Cruising Privileges

Take a load off and relax! After spending six months with the Company, all parttime and full time employees and their immediate families become eligible forexclusive cruising discount privileges based on availability.

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Insurance

We offer a great selection of insurance options to keep you and your familyhealthy. The following is included in your benefits package:

Medical Dental Vision Group Life Short and Long Term Disability Travel Accident Healthcare and Dependent Care Spending Acco

Wellness & Work Life Balance

RCL provides numerous options to improve your overall health and wellness.Fitness facilities with unique and challenging classes, financial workshops, andeven online informational boards and forums are available to keep you informed,and help you achieve your personal goals.

Personal Health On-site Wellness Center On-site Day Care (Port of Miami Campus) On-site Medical Clinic (Port of Miami Campus) Financial Seminars Employee Assistance Program Tuition Reimbursement Adoption Assistance Program

Financial & Retirement Plans

When you set sail with RCL, we help you realize your financial dreams. We provide several retirement benefits, such as non-contributory pension plans and

401(k) plans, along with an employee stock purchase plan, which are designed tohelp you reach your financial goals.

Paid Time Off

As one of the leading providers in the vacation and hospitality industry, weunderstand the importance of making time to rest and relax. We also understand

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when life happens, sickness and emergencies are unavoidable. RCL providesample amounts of paid personal, vacation, and holiday pay, so when life catches upto you, you don‟t fall behind.

Additional awards are:

On-site Cafeteria Credit Union Employee Discount Program Aflac and Seniority Matters Adoption Assistance Recognition Programs Legal Insurance And many more

The Benefits are Endless!

FEATURES OF CREDIT INSURANCE

Credit insurance can help you in case you can‟t pay your debt if you are dealing

with certain types of emergencies. You have a variety of features to choose fromwhen considering insurance. Policies vary and you can discuss details with thelender, including the premium amount, whether it can be included in your monthly

loan payment, the length of your coverage and the limits on your benefits.Consider what you can afford. Don‟t blame your premiums for your inability to pay.

Enjoy 10X Rewards, Fuel Savings, 10,000 Air Miles & More. Apply now!

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Individual Protection

Credit life insurance pays off a portion or your total loan upon death during theterm of coverage. Credit disability, accident or health insurance takes care ofmonthly payments over a limited amount of time in case of illness or accident.Credit involuntary loss of income insurance pays your monthly payments if youget laid off or lose your job due to no fault of your own. The disability and loss ofincome policies pay the creditor for a specific amount of time outlined in the

policy terms, according to the National Association of Insurance Commissioners.

Property and Business

You can also get credit insurance policies not directly related to your ability torepay your debt. Credit property insurance protects secured loans in case of theft,

accident or natural disasters that destroy personal property. Small business ownersconsider business or trade credit insurance that insures lines of credit and protectsthem from debtors who default on payments or go bankrupt.

How You Pay

Payments vary on credit insurance. A singe premium method includes both theoriginal loan amount and the insurance premium in the monthly payment. As the

borrower, you would have a higher monthly loan amount when you decide toinclude credit insurance. Creditors might offer the monthly outstanding balance

payments for credit cards, home equity loans or other debts. The credit insurance premium changes monthly, based on the debt increased over time, if you choose anopen-end account. For closed-end accounts, you have a fixed amount each monthfor your credit insurance premium and the amount of debt does not change eachmonth.

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CHAPTER 3Future Management of the Credit Risk

Even the most rigorous credit manage-ment cannot prevent occasional bad

debts.With the prospect of a tighteninginsurance marketplace, more than ever an

emphasis on risk management control in credit is vital.Whilst NCI was initially

established18 years ago as a specialist insurance broker, we realize that our business is actually about protecting the profitability of our clients. Credit

insurance is still the ultimate safeguard against bad debts but better business

practices in trade credit management also help to improve profitability on a day-to-

day basis. Over the years we have developed a complete range of trade credit

services intended to provide a holistic approach to support each clients‟ future

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management of such an important asset. Apart from credit insurance, there are a

range of risk management services available from the simple provision of

information prepared on an up-to-date and fresh basis through to independent

credit limit analysis,debtor monitoring and pro-active risk mitigation advice.

Specialist services in the area of collection support and recruitment and personnelare also available, providing a broad range of credit related services but all inter-

actively supporting the protection of each clients‟ profitability. The future

management of credit will, in our view, become more reliant on active

management in all areas of a business once the sale has been made.There is an

increasing pressure on margins and efficiencies in business and the future of an

active credit team will have less and less to do with the traditional functionality of

an in-house credit department.

CHAPTE R 4 – Benefits of buying credit insurance in scb

Features

1. Cheque-On-Call Plus

At Standard Chartered, we give you the financial flexibility you need. WithStandard Chartered Cheque-on-Call Plus, you can have more financial flexibilityas you realise your goals. Enjoy affordable interest rates and a repayment plan ofup to 60 months.

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With Cheque-On-Call Plus, you will enjoy the following benefits:

Low interest rate - 9.88% Choose from 6 plans - 9 months, 12 months, 24 months, 36 months, 48

months or 60 months No cancellation fee More financial flexibility

2. Balance Transfer

Your chance to enjoy maximum savings. Transfer the outstanding balance on yourcredit card or charge card with other banks to your Standard Chartered credit card.Then stretch your repayments for as long as you can. Take your time to enjoy the

benefits!

Save more with fixed monthly instalments Greater convenience and control when you consolidate your balances Enjoy dining discounts nationwide with your Standard Chartered credit card

3. Balance Transfer PLUS

Your chance to enjoy maximum savings. Transfer the outstanding balance on your

credit card or charge card with other banks to your Standard Chartered credit card.Then stretch your repayments for as long as you can. Take your time to enjoy the

benefits!

Save more with fixed monthly instalments up to 36 months tenure Enjoy early settlement with rebates at any time Greater convenience and control when you consolidate your balances Enjoy dining discounts nationwide with your Standard Chartered Credit card

4. FlexiPay

Wouldn't it be nice to have more financial flexibility whenever you need it? Wantto own the latest gadgets? What about the times when your car needs servicing? Orwhen you need to pay medical expenses?

FlexiPay gives you the option to convert any of your Standard Chartered CreditCard purchase(s) to 12 month instalments at a low interest rate of 4.99%*p.a.

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CHAPTER 5

Insurance market sees 25 percent growth

The insurance market grew by more than 25 percent in the first nine months,according to the Association of Vietnamese Insurers.

The non-life insurance sector reported growth of 25.97 percent in premiumincome, which topped 12.417 trillion VND (621 million USD).

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The life insurance sector reported premium incomes of 9.767 trillion VND, a 25 percent rise year on year.

Prudential topped the industry with more than 3.8 trillion VND , up 12.9 percent.

New contracts accounted for 2.478 trillion VND of the premiums paid, a 35 percent increase.

Bao Viet collected 2.944 trillion VND (27.4 percent) and Manulife was in third place with over 1 trillion VND (53.4 percent).

The companies collected premiums on 4.143 million contracts, 4 percent higherthan a year earlier.

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CHAPTER 6 – CASE STUDY

FORGEWELD

While many SMEs recognise the benefit of protecting their business against therisk of not getting paid, some think that existing credit insurance policies arecostly, confusing and impractical for a smaller business that may have little in theway of credit management support.

Although some see the risk of not getting paid as being a part of everyday businesslife, other companies such as Midlands-based Forgeweld Ltd are being more proactive. Indeed Forgeweld is one of the very first to take advantage of a new „offthe shelf‟ trade credit insurance policy from Euler Hermes called „Simplicity‟ – a

product designed to bring peace of mind within minutes to small firms withchallenging customers.

And as far as Forgeweld‟s Managing Director Kevin Carter is concerned, the product is certainly living up to its name. Forgeweld has been supplying specialistwelding consumables, equipment and associated products for almost 30 years.While it works with a handful of leading names on major contracts, the vast

majority of its business comes from larger numbers of smaller customers as Kevinexplains:

“We have many customers, who owe £1,000 here, or £3,000 there, and it only

takes a handful of these debts to go bad and you can end up losing quite a bit ofmoney,” he says.

This makes Kevin nervous about taking on new business: “When there is that

doubt hanging over you about whether you will be paid, it can change how youfeel about taking on a new account,” he continues. “We had a customer recently

who we had been working with for 18 months on a pro-forma basis, who asked mefor credit. The following week they went bust. This is the difficult environment wecurrently work in; customers with whom you have an established track record canfail without warning, and we expect many more to fail as we emerge from therecession.”

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Kevin is no stranger to the challenge of insuring against bad debts. More than 10years ago he lost a substantial sum following the collapse of a major engineeringand forging group and sought credit insurance. But with improving fortunes, andhis losses under control, the cost of the premium seemed expensive compared tothe risk. Having traded without credit insurance for some time, but with the risknow increasing, he was reluctant to return to what he had before. Then he learnedabout “Simplicity”.

“It is a policy that perfectly suits my business,” he says. “The premiums areaffordable and policy matches my risk. What‟s more, I don‟t have to manage the

policy as Euler Hermes effectively does it all for me.”

“Simplicity” offers simple pricing, simple administration and a simple and fast

claims process on all debts over £200 so that if a payment remains outstanding, the

potential impact on a company‟s cashflow is minimised. It is also the first productif its kind to remove the necessity for credit limits.

Businesses are covered in the event of non-payment or insolvency of theircustomer for a minimum of 60 percent of the unpaid debt value to an agreedmaximum limit (£4,000 per claim) as standard. This can be increased to 90 percentwith a higher maximum (£16,000) if the policyholder applies for a Euler Hermes„grade‟, (via Euler Hermes‟ online platform) and their customer is assessed as an

acceptable risk.

“Simplicity” requires no more administration than a motor or home contents policy, but provides a level of protection that helps business owners sleep morecomfortably at night. Kevin concurs: “Simplicity” is simple to understand, simpleto implement and simple to use,” he says.

“It gives me the confidence to grow my existing customers and take on new business knowing that even in the very worst case scenario, I will get a large percentage of my money back. Euler does everything: they monitor my accountsand notify me of any significant changes in risk so that I can make better-informeddecisions about the way we do business.

“When I get home now in the evenings, I no longer worry about accounts that

might have previously made me nervous. “Simplicity” gives me total peace ofmind.”





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FUNBOX MEDIA LTD

Serial entrepreneur Barry Hatch is no stranger to the challenges of late paymentand the impact that a slow, or non- paying customer can have on the company„s

cashflow.

Working in the home entertainments sector, he has also experienced at first handthe risk that comes from the potential collapse of major High Street names such asHMV, Blockbuster and GAME etc, and the tremors that are inevitably felt alongthe supply chain. He recognises too that sometimes the biggest risk can come from

businesses with which he has previously enjoyed a long and successful relationship

where it is all too easy to think „these guys will never go‟. Perhaps not surprisingly,given his knowledge and experience, Barry takes steps to protect his company – Funbox Media Limited – from some of the uncertainties of business by using tradecredit insurance from Euler Hermes. Again, not surprisingly he has good reason forcongratulating himself on the decision to credit insure following a recent issue witha large customer which might have had even more serious and far reachingconsequences.

Funbox, which Barry founded in 2010, publishes computer and video games,selling primarily through distribution. To publish a new title takes considerable

time and expertise, often requiring the need to develop the product further and gainthe necessary approvals and licences for distribution around the world. Having

products such as The Cube on Wii makes Funbox an attractive partner, with agame that people want to buy.

Selling products that are in high demand is only one half of the challenge; makingsure you get paid for the products you deliver is perhaps the greater. So when along-standing customer of Funbox began stonewalling on payments, Barry was pleased that he had the comfort of being credit insured: “We had looked at credit

insurance previously, but originally decided against it on the grounds of cost andthe established relationships we had with our customers,” he explains. “But after aseries of hits to our bottom line as a result of companies going to the wall, wedecided to re-think our strategy.”

He was pleased that he did so: “The benefit of credit insurance is that it not only

protects you if a company suddenly becomes insolvent, but it also covers you

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against protracted default. In our case our customer – who was experiencing itsown cashflow difficulties having been a supplier to both GAME and HMV – waswithholding our payments. Although we had agreed a repayment plan, it found itwas unable to honour those plans and so we were obliged to makea claim.”

This is where the true „value‟ of credit insurance has come into its own: “Euler

Hermes was extremely supportive throughout the claims process,” he continues,

“and although it wasn‟t entirely painless, it could have been substantially more

painful! In the event, a substantial part of the claim was paid in full, and that hasenabled me to keep the cash flowing. Put another way, without the claim being

paid my business would have been seriously affected.”

Although the customer in question continues to trade, Funbox chooses to source its

customers elsewhere, and always with Euler Hermes‟ support: “The policy is easyto manage and we can apply for limits online,” Barry says. “In the vast majority ofcases, the limits we apply for are granted, and if they are not then I simply look todo business with that customer on different terms. Because of the recent downturn,customers understand that payment upfront is sometimes necessary, and we oftennegotiate along these lines.”

“When we have a product that people want, and the distributors want to sell, we

will always find ways of doing business together,” he concludes. “Whenever I can,however, I prefer to have that business credit insured.”

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Understanding the Credit Insurance and its Benefits

Credit insurance, also known as payment protection insurance, credit protection

insurance or loan repayment insurance, enables individuals to insure theirrepayment of debt if the borrower is unable to pay due to circumstances like borrower‟s illness or sudden death or his inability to repay because he lost his job.

You can buy credit insurance to insure all types of loans, such as home mortgageloan, car loans and loans from finance companies. Moreover, credit insurance

policy also provides protection to your account receivables against the bad debtsand allows you to give more credit to customers and hence, increase your sales.

Credit insurance ensures that your business will be paid for the goods and servicesthat were delivered to your customers. Exact damage coverage depends on the

terms and conditions mentioned in the credit insurance policy. Always seekguidance of Your Personal Financial Mentor when you are choosing the creditinsurance plan in order to decide which package will be favorable according toyour requirements. Every credit insurance policy is customized according to theneeds of an individual or his business. Many companies cover the majority of their

business in a credit insurance policy, including domestic and export accounts. Ifyour company has operations in different countries, you can choose multi-country

policies as well.

There are several benefits of credit insurance and some of them are explained below:

Loss protection

Account receivables in any business are one of the riskiest assets. Credit insurance provides protection against the risk of potential bad debt losses and hence, providessafety for your business.

Increase the borrowing limit

It also provides access to the working capital that can help you avoid cash flow problems and grow your financial prospects. Credit insurance policy increases theworking capital availability from the receivables you provide as a security to yourlender. Therefore, many ineligible receivables, such as foreign receivable andreceivables with few accounts can now be added in your borrowing base toincrease the borrowing capacity.

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Safely expand the sale

Credit insurance allows you to expand your sales without any worry. If you want toexpand the credit lines with your current customers, or you want to expand your

business operations in a new market, credit insurance provides you a safe passageto grow your business to new heights.

Enable low bad debt reserves

Credit insurance allows you to reduce your bad debt reserves and manage thewrite-offs with confidence. Therefore, you can improve your profits, financialratios and shareholder equity by taking the excess reserves back into the income. Itstrengthens your position in the market and increases the value of your share.

Ensure strong controls on credit risk management

Credit insurance companies track millions of companies around the world andhence, provide you the necessary information in order to make sure that you areselling to customers with strong credit standing in the market. It allows you tomake a better decision when you are planning to extend credit.