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Only successor can claim shares or debentures, and not nominee, rules SC

The claim over financial instruments such as share and debenture certificates should be with the successor by law or by will of the original owner, and not with the nominee, the Supreme Court has ruled.

As per a judgment on December 14, even if a person is a nominee in a share/debenture certificate, he is not entitled to inherit it by default. The inheritance or the succession of these instruments will be determined by the contents of the deceased’s will or as per the succession laws. Succession in India is determined either by a will written by the owner or by laws such as the Hindu Succession Act or the Indian Succession Act.

The judgment was passed in a family dispute where the patriarch of the family gave the inheritance of shares and debentures to one of his two sons. The other son, who was the nominee in the instruments, objected to this. The nominee had claimed that he was the beneficial owner of the shares by virtue of being the nominee.

The issue reached the Bombay High Court where a division bench held that nominees are appointed to ensure that the instruments are protected, until the legal heirs or legal representatives of the deceased take appropriate steps to claim their rights over it. The HC concluded that the provisions relating to nomination do not have precedence over the law in relation to testamentary or intestate (succession without will).

The issue ultimately reached the Supreme Court in 2017, and a decision in the case was passed by a two-judge bench comprising Justice Hrishikesh Roy and Sanjay Karol.

It was contended in the court that none of the laws contemplate for a ‘third mode of succession’ wherein a person inherits financial instruments merely by being named as a successor. It was also contended that the provisions of the Companies Act, 1956 and 2013 the intention of having a nominee in the share/debenture certificate is to only aid the process of transfer of shares and not be made a successor.

The parties were represented by lawyer Rohit Anil Rathi and Rooh-e-hina Dua.

Source- Moneycontrol

Pros and Cons of Health Insurance Portability

The common reasons that force most people to switch health insurance providers, let’s discuss the pros and cons of health insurance portability.

Pros:

1.There is a customization option that comes with portability through which you can easily modify the policy as per your requirements and lifestyle.
2.The existing amount will be clubbed with no claim bonus to calculate a new sum insured.
3.All the benefits of your existing plan will remain in force, even after you opt for portability.
4.Because of the high competition, insurance companies provide existing benefits at lower premiums.

Cons:

1.You can opt for portability only when the renewal date is approaching.
2.You can choose only similar kinds of products.
3.Usually, additional benefits can result in higher premiums.
4.If you want to move from group plans to individual plans, then you might have to lose some advantages that you enjoy with your existing plans.

Health Insurance Portability Rules

Permitted Policy Types

An insured can port only similar policies. For example, if a policyholder is entitled to a reimbursement policy, then he can only port to another reimbursement policy or from one top-up plan to another. However, a family or an individual health plan can also be ported into a similar policy.

Permitted Company Type

A policyholder can port his/her insurance plan from any general or specialized insurance company to the other.

Permitted Renewal

Health Insurance Portability is allowed only at the time of renewal. Also, it is important to renew your health plan on time without any breaks to take advantage of the same.

Permitted Intimation

Those who wish to port their health insurance first need to inform the existing insurance company in writing, which should be provided 45 days before the renewal date of the current insurance policy.

Sum Insured

Policyholders are allowed to ask for an increase in the minimum sum insured at the time of portability. However, its approval depends upon the insurance company.

Acknowledgment

Within three days of the application, the company will inform you regarding your portability request.

Premiums And Bonuses

As per the insurer’s specific underwriting norms, they are free to levy premiums. Therefore, the premiums may vary. However, those who come under the high-risk category may have to pay a higher premium on porting.

Grace Period

In case the application of porting is under-process, then the applicants are eligible for a grace period of 30 days. During this time, the insured has to pay the premium on a pro-rata basis to avail of this feature. As per the IRDA guidelines, the insured cannot be forced to pay the premium for the whole year.

Porting Charges

There are no charges for Health insurance portability.

Why you need Liability Insurance

This type of insurance policy is generally procured by companies or individuals who may be held liable, legally for injuries or other issues. This especially the case for hospitals, doctors, or even business owners.

An example would be, if a product manufacturer sells products that have been faulty or cause damage to other’s products, then he/she may be sued for the damages caused.

Procuring liability insurance will cover the manufacturer from ensuing legal costs.

Liability insurance is one part of the general insurance policy itself under the risk transference category.

In many countries, liability insurance is mandatory especially for drivers of public transport vehicles. The scope of this form of insurance in India has been defined by the Public Liability Insurance Act of 1991.

Liability Insurance Plans:

Public Liability Insurance
Product Liability
Employer Liability
Third-Party Liability

How is the Premium Amount Decided?

The premium that is to be paid by the insured will be worked out using the base rate based on the insurance company’s needs and assessments.

Another factor that is taken into consideration is the amount of risk that the company and its products come with. The higher the risk, the higher is the premium to be paid.

Claim history, size of the risk, and the company’s approach to the risk are additional factors.

While deciding the premium amount, insurance companies take into consideration the environment, the number of claims made previously, and their business record.

Companies Providing Liability Insurance Policy are:

Several companies within India provide different forms of liability insurance covers. Some of these are –

HDFC Ergo Commercial General Liability – this insurance policy protects against claims of property damage or bodily injury for which the company is liable.
ICICI Lombard offers numerous liability insurance covers to suit business requirements.
Bharti AXA Commercial General Liability Policy offers cover for liabilities that are a result of business processes and operations.

Liability Insurance Claim Process:

The claims process varies from one company to the other. There is generally a form to be filled for the same post which all necessary documents will have to be provided.

However, when it comes to liabilities it is not as simple. There may be court cases or an out-of-court settlement.

The claims process will be different based on what the claim is being made for.

8 Easy Tips to Prevent Car Insurance Claim Rejection

Rejections, of all kinds, can be disappointing. If the rejection is related to car insurance, it can affect your bank balance. Insurance doesn’t offer instant gratification. It is a promise based on certain terms and conditions.

It is natural for a policyholder to feel offended if the insurance company doesn’t live up to the promise of claim settlement. But there are two sides to a coin. And the car insurance company has its reasons for claim rejection.

1) Don’t Increase Consequential Loss
Consequential loss occurs when you try to run the car after an accident. This is a major loss in terms of damage. For example, if your car is submerged in water and you try to start the engine.

The car had already suffered water damage. But because you tried to start the car, additional water has affected the engine due to which the hydrostatic lock got activated.

In this example, your insurer will pay only to cover the initial damage caused by the water and not the expenses related to the hydrostatic lock. This consequential loss claim will be rejected.

2) Respect the Law
An insurer will honor a claim only when unintentional damage has occurred. When you break the law, your intentions are not in the best interest of you or those around you.

Thus, your claim will be rejected. Always make sure that you respect the law. For example, make sure your driving license is valid.

3) Follow the Claim Process
Each insurance company has a set of rules when it comes to their claim process. To get your claim honored, you need to follow your insurer’s claim process. This could include intimating the insurance company within stipulated time under the right conditions, or submitting the required documents, or coordinating with the claims team.

4) Be Honest
In case of an accident where multiple parties are involved, only the true claim will be honored.

Your claim will be rejected if you are found to be guilty of falsification. Remember that insurance companies carry out a thorough investigation of the incident via various means. Thus, always be truthful about what exactly caused the damage or injuries.

5) Renew in Time
Always make it a point to renew your car insurance policy in time. A claim will be rejected without any investigation if you raised it against an expired policy. Renew your policy and go through the inclusions and exclusions thoroughly if you want your claim to be honored.

Remember that reading the fine print will help you get a clear idea about the policy. You need to be sure that you raised the claim in a correct manner and against a corresponding inclusion.

6) Inform about Changes
One of the most common reasons for a claim getting rejected is that the insurer is not aware of the changes made to the car. For example, installing a CNG kit in your car.

Your claim may be rejected if the fuel type on your car insurance policy does not match the actual fuel type of your car. The same goes for any modification. You need to inform your insurer about all types of car modifications.

7) Don’t Repair without Informing
Last but not least, do not send your car for repairs without getting a go-ahead from your insurer. This is because, after an accident, your car will be surveyed for the extent of damage it has suffered.

Your insurer will give an approximate estimate of the expenses related to repairing this damage. Your claim can be rejected if you get your car repaired without a survey.

8) Co-operate
You need to raise a claim within a specified period and cooperate with the claims team regarding details related to the event against which the claim is raised. For example, the claims inspector might ask you some questions if you have raised a claim for a car accident. You need to answer those questions honestly.

If you fail to provide an honest narrative (don’t rely on the garage) or if you do not provide supporting documents (if needed), the insurance company might follow up with you for a while but eventually will reject your claim based on non-cooperation.

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