Thursday, 28 July 2016

How Assuring is Your Insurance?

Life insurance penetration in India is abysmally low and a large part of our population is still not covered by any insurance (life/health/general). Although the Government has also taken steps to cover the entire population by offering insurance for nominal premium through bank accounts, there is still a lot to be done. Sadly, the part which is “insured” is also not appropriately and adequately insured. The reason is very simple. We do not know what is written in our policy. We don’t even know if the policy is the right fit for us. We take more time choosing the toppings on our pizzas than in choosing an insurance plan. With insurance going online and now the DEMAT way, hundreds of plans are available at the click of a button but, we don’t really know if we will be secure at the time of adversity.

Pause. Pull out that insurance policy and read the fine print.

First things first, inform your appointed nominee about the existence of your policy.

Now go to the schedule. Check how long you will have to pay your premium. This is a recurring financial obligation. So make sure you have the funds to match.

Note the premium due date. Always pay your premiums on time. Defaulting on premium could reduce your benefits and/or eventually lapse your policy. You will no longer be covered.

Next read the benefits. What is covered and what is not. Check when you will receive the benefits and under what conditions.

If you have any queries, contact the insurer immediately.

If what you had signed up for, is different from what is in print, you can return the policy under the free- look period (15/30 days depending on mode of sale). If you check the policy immediately upon receipt of document, you can avert a possible loss.

You can ask the insurance agent to explain the benefits and the charges under the policy and choose a plan best suited to your needs. You can even ask the agent the commission he/she will earn under the plans. This is a good indicator of plans which he/she might be interested in pushing even though you may not need it.

Unit linked plans contain investment in capital markets and are invested at your risk while under traditional plans, the insurance company undertakes the risk. Greater rewards for greater risk.

Some general dos and don’ts:

  • Don’t sign blank forms and cheques.

  • Read and understand the Terms and conditions carefully. Including exclusions and disclaimers. If it is unclear seek examples and illustrations.

  • Communicate with authorized agents/employees of the insurers only. Ensure all your communication is reduced into writing for later reference. Email communication can be printed and stored.  

  • Benefits-Re-read your benefits. This is what you are supposed to get on the happening of the insured event.

  • Grace period-see how much time you have got if you miss paying premium on the premium due date and what happens if you don’t pay your premium.

  • Surrender/cancellation-check what the policy says in case of surrender or cancellation of policy.

  • Charges-what are the costs of enjoying the proposed benefits? Get clarity from the agent.

  • If you have not received the copies of documents submitted by you or the copy is not clear, you can request the insurer for fresh and legible copy. Check if it is the same as those signed by you.

Through every medium, awareness on these aspects is spread by the regulator. However, the efforts fall short when you see and hear so many cases of frauds and mis-sale. If you have any grievance, you must approach the insurer – sooner the better. The insurer will resolve the matter within 30 days. If you are still unsatisfied, you can approach the insurance ombudsman. The IRDAI has launched grievance redressal mechanism on its portal IGMS.

So go ahead and secure your peace of mind.

                                            - By Harini Shrinivasan
Monday, 18 July 2016

Got An Idea? Protect It.

image courtesy shutterstock

Congratulations! You have struck gold. You have an idea which could ring in millions of rupees. But don’t be in a hurry to share it just yet. Your ideas could be unique and fetch you some revenue if you hold on to that thought and play it cautiously. While sharing is inevitable for funding and development, you need to have adequate safeguards to protect your intellectual property. Ensure that you have a signed Non-Disclosure Agreement(NDA) with every party (internal and external) before you let them into your little secret.

NDAs also known as confidentiality agreements impose a duty on the receiver of confidential information to protect the information from being released in the public domain and utilize it only for the agreed purpose. With Startups being the flavor of the season, your idea could be poached before you know it.

Let us examine the concept. What is confidential information- It is any idea or information unique in nature capable of generating revenue when utilized. Put simply, it is any data unique to your business which when known to others provides monetary benefits and hence needs to be protected. It could be customer lists, technical knowhow, method/process, or any Intellectual Property.
How to protect it- Not sharing it is the ideal situation but for the development of the idea, sharing it with external parties is inevitable. The first step is to include a confidentiality clause in your employment agreements. Even employees should be made responsible for protecting information. Share only on a need to know basis. Before meetings with third parties, execute NDAs so that verbal information shall also be protected. During the meeting reduce the information to writing and circulate a note so that the parties can agree and protect the information. Secure your intellectual property rights legally. Ensure your NDAs have a clause to cascade obligation to employees and contractors of third parties. The law assists the vigilant and not a careless individual who has been sleeping over his /her rights.

An NDA could be one way or mutual in nature, depending on who is sharing the information. The NDA should clearly state the purpose for which the sharing of information is proposed. Generally, 3 to 5 years is sufficient time for demanding protection, as by the end of its term, the information would find its way legally into the public domain in normal course.
The NDAs should also provide clauses for governing law and jurisdiction of courts. Situations of mandatory disclosure and exclusions can also be stated.

In India, NDAs are required to be duly stamped and executed for enforceability. The Indian Contract Act, 1872 governs all such agreements.

If you need any assistance or advice on this topic, please feel free to connect with us at 

Wednesday, 6 July 2016

Maharashtra Takes a Step Towards Prohibiting Social Boycott

image courtesy: Shuttershock

No man is an island. Man is a social animal. We need the company of others as much as we need food and water. The Constitution of India has exalted the right to live with human dignity to the position of a fundamental right and indeed it is fundamental in every sense. Social boycott or ostracism is then a crime. Neither to be perpetrated, nor tolerated. The Government of Maharashtra has taken a very bold step in the direction of social change. It has recently passed the Maharashtra Prohibition of Social Boycott Act, 2016 which quite exhaustively addresses the issue of social boycott. It is interesting to note that this Act covers social boycott and does not specifically mention excommunication. Previously the Bombay Prevention of Excommunication Act, 1949 had been challenged and struck down by the Supreme Court as being unconstitutional for violating the fundamental right to manage religious affairs of a community in the Dawoodi Bohra case. Social boycott is a larger term encompassing all acts of ostracism. The present Act strives for social inclusion and condemns all types of acts of ostracism. Any act which causes social boycott including expulsion from the community shall be void and unlawful. From this perspective, the Act appears to be constitutionally valid although it covers all communities and prohibits expulsion. It also has specific reference to access to wakf property. Thus under the pretext of managing religious affairs no kind of social boycott can be perpetuated. Under a master stroke the Act tries to solve the problem plaguing rural Maharashtra.

Other states can very well emulate Maharashtra. But, certain questions arise on plain reading of the Act. The first issue here is the complaint resolution machinery. The victim has to file a complaint with the Police or the Magistrate. The complaints under this Act would have to join the queue in the already overburdened criminal justice system. The Police machinery shall investigate the complaints. The Magistrate has power to provide protection to victim as necessary during the trial and the trial is to be completed within 6 months from date of filing charge-sheet.While it is too early in the day to comment on the efficiency of the machinery and the closure of cases under the Act, questions arise whether the victims can be assured of protection and fair treatment in caste ridden areas where powerful caste panchayats run parallel justice systems and heavily influence even the Police system. The Act also creates the post of a Social Boycott Prohibition Officer (Officer) who shall be an officer of the Government and shall be appointed by the State Government. The Officer’s duties are primarily that of detecting commission of offences, assisting the Magistrate and the Police in investigation and trial, and overseeing the compliance with the Court order of community service. The Officer shall have no powers except to report back to the Magistrate, although the Act does allow him to vaguely “take such action as he deems fit”. The creation of the Officer’s post and his role stated in the Act suggest the Government’s serious intentions towards resolving instances of social boycott and tensions. However, unless the Officer is provided sufficient powers and immunity for his actions, he shall remain a hollow functionary. The Officer would need more ammunition than is provided at present. Another aspect which needs consideration is the treatment of offences. Instead of offences under the Act being bailable and cognizable, the offences should be categorized as bailable/non-bailable, cognizable/non-cognizable based on the nature of acts and dealt more seriously and brought at par with other heinous crimes under the Indian Penal Code.

The Act also provides for compensation to be given to victims out of the fines recovered by the Courts. This clause is a step in the direction of recognizing and assigning tortuous liability of the perpetrator. The well intentioned Act raises questions whether issues of social behavior can be resolved by such policing or whether it will only make matters worse. Considering the past trends, the caste panchayats usually try to brainwash and rationalize their actions and turn offenders into heroes. 

Only time will tell the effectiveness of this Act. Through education and awareness, desired behavioral change needs to be internalized. All in all, the Maharashtra Prohibition of Social Boycott Act 2016 is a welcome step in the right direction.