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    "India Insurance 2020": Convergence of Insurance With Broader Financial Services

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    Nikhil Aggarwal
    The document discusses the convergence of insurance and broader financial services in India. It notes that consumers only have five basic financial needs, which blurs the lines between different financial products and providers. Regulations are also becoming more similar, with different regulators allowing foreign ownership and permitting overlapping activities. There are inconsistencies in tax treatment between instruments that create arbitrage opportunities. The document examines arguments for convergence in regulations, tax treatment, distribution channels, products, and providers to simplify matters for customers, companies, and regulators.

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    "India Insurance 2020": Convergence of Insurance With Broader Financial Services

    Uploaded by

    Nikhil Aggarwal
    4 views7 pages
    The document discusses the convergence of insurance and broader financial services in India. It notes that consumers only have five basic financial needs, which blurs the lines between different financial products and providers. Regulations are also becoming more similar, with different regulators allowing foreign ownership and permitting overlapping activities. There are inconsistencies in tax treatment between instruments that create arbitrage opportunities. The document examines arguments for convergence in regulations, tax treatment, distribution channels, products, and providers to simplify matters for customers, companies, and regulators.

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    Alpesh Shah

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    The document discusses the convergence of insurance and broader financial services in India. It notes that consumers only have five basic financial needs, which blurs the lines between different financial products and providers. Regulations are also becoming more similar, with different regulators allowing foreign ownership and permitting overlapping activities. There are inconsistencies in tax treatment between instruments that create arbitrage opportunities. The document examines arguments for convergence in regulations, tax treatment, distribution channels, products, and providers to simplify matters for customers, companies, and regulators.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
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    4 views7 pages

    "India Insurance 2020": Convergence of Insurance With Broader Financial Services

    Uploaded by

    Nikhil Aggarwal
    The document discusses the convergence of insurance and broader financial services in India. It notes that consumers only have five basic financial needs, which blurs the lines between different financial products and providers. Regulations are also becoming more similar, with different regulators allowing foreign ownership and permitting overlapping activities. There are inconsistencies in tax treatment between instruments that create arbitrage opportunities. The document examines arguments for convergence in regulations, tax treatment, distribution channels, products, and providers to simplify matters for customers, companies, and regulators.

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    of 7

    "India Insurance 2020"

    Convergence of insurance with broader financial services


    January 12, 2010

    Why are we talking of convergence?

    Xxxxx-xx/Footer

    Consumers have five basic FS needs


    Insure (risk) Transact

    Credit

    Invest

    Save

    Xxxxx-xx/Footer

    Providers are becoming fungible


    FS needs
    Transact

    Banks

    NBFC's

    Life Ins

    Non-life Ins

    Health Ins

    AMCs

    Broking

    Save

    Invest

    Credit

    Insure
    Life Non-life Health Core activity
    Xxxxx-xx/Footer

    New core activity

    Minor add-on activity


    3

    Regulations / tax treatment


    Multiple regulators ... RBI, SEBI, NHB, IRDA, PFRDA, ... ... With different regulations for Foreign ownership permitted Capital requirements Activities permitted Alignment of tax treatment / incentives for different instruments? To prevent arbitrage opportunities e.g. Taxation for income MFs vs fixed deposits Taxation of MFs vs insurance ULIPs vs direct equity ...

    Treatment in the proposed DTC?


    Product alignment across segments? e.g. ULIP expense caps vs MFs; ...
    Xxxxx-xx/Footer

    Why are we talking of convergence?


    Demand: consumers have just five basic needs they do not differentiate products / providers Supply: providers are widening their product offering, and becoming fungible; and so are distributors - e.g. IFAs, banks offer all of the key products to all customers Regulations: different regulators for each segment, with different regulations on foreign ownership, capital requirements and activities permitted

    Tax treatment: is different for different instruments creating arbitrage opportunities

    Xxxxx-xx/Footer

    What do we mean by convergence?


    Convergence of what? Regulators / regulations Tax treatment Distribution Products Providers ... Objective of convergence make life simple for: Customers Providers Regulators Is India ready for convergence? ...
    Xxxxx-xx/Footer

    Consumer, provider and regulatory readiness


    6

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