Orphan Insurance Policies – Have you one?


Each insurance policy is attached to an Agent, who is the prime intermediary between the insurance company and the insured.

An Insurance policy is said to be orphaned, when the Agent who had first sold the insurance policy is no longer associated with the insurance company. This can be due to the fact that the agent has left to pursue other options or moved on to another company.

In India, there has been an explosive growth in the number of new insurance policies as also the number of new agents.  Hence, in the recent past the number of orphan insurance policies is on the increase.

As a step to encourage agents to continue to service the insurance policies, IRDA has issued Guidelines pertaining to Archived Agency Licenses.

IRDA  has been decided to grant one time chance to all insurers to float  campaigns to renew the archived agency licenses. These campaigns can be floated upto 31.12.2013.

Beyond this date no request for renewal of archived license will be entertained. Further, it has also been decided to relax fresh examination and training criteria laid down vide circular Ref no. RDA/CAGTS/CIR/LCE/082/05/2010.

However, such agents seeking renewal of licenses shall undergo renewal training as mandated vide Regulation 5 of IRDA (Licensing of Insurance Agents) Regulations, 2000.

With this steps, it has hoped that Insurance companies will motivate their old agents to come back, and renew their engagement with the policy holders.


Sahara Papers – India Jugaad 1


Every cloud has a silver lining. As a result of Supreme Court of India judgment, Sahara Group has sent truckloads of papers to SEBI office.

Normally, companies file the required information with SEBI in an electronic mode. However, in the recent past, this is the first time, that SEBI had requisitioned paper documents from a corporate.

In defending the stand that it has to pay only a fraction of what Sebi has ordered it to, Lucknow-based Sahara Group decided to send millions of documents, packed in 31,000+ cartons loaded in 128 trucks, to the Sebi headquarters at Bandra Kurla.

This is where Indian Jugaad played an important role. After numerous brainstorming sessions, the regulator called upon Stock Holding Corporation of India (SHCIL), team to handle the processing of the physical documents.

The names and addresses of the Investors had to be retrieved from the bundles of documents. The regulator has now moved the documents to a warehouse in Navi Mumbai, in the outskirts of the city.

SHCIL deployed its Robotic Team, in scanning the Sahara Papers.

Background of SHCIL Robots:

Built in the early ’90s to store share certificates, the warehouse belongs to Stock Holding Corporation of India (SHCIL), a custodial and depository services firm. At the time, the government was unsure whether it could transform the stock markets to introduce dematerialised (demat) shares. But with the advent of the paperless era in ’94, the 80,000-square-foot facility with 40-foot high walls was left largely unused.

After two decades, it has now come handy. SHCIL has installed one robot and is in the process of placing three more to quicken Sebi’s humongous job of scanning millions of documents to verify Sahara’s claim. This is the first time that a regulatory authority in India is banking on robotics to prove itself in what has become a high-decibel tussle.

Over the years, SHCIL has been associated with many corporate’s in their endeavor to move into a digital preservation era. However, the association with Sahara has resulted in a very positive image for SHCIL

Cheque Truncation System in India – Unique Return Reasons


The NI Act defines a truncated cheque to mean “a cheque which is truncated during the course of a clearing cycle, either by the Clearing House or by the bank, whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing” (cf. Section 6 of the NI Act, 1881).

New Delhi Bankers’ Clearing House has published detailed Procedural Guidelines for Cheque Truncation System (CTS) (Version 2.0)


The following Cheque return reasons are exclusive for CTS Clearings:

Bank customers need to understand them, so that they can take adequate steps to enable them to receive money from the Drawer of the Cheque.

  • Image not clear, present again with paper: The scan image of the cheque received by the Paying Bank is not clear. Hence, the request to represent again with the Paper Cheque.
  • Present with document: Same as above


  • Item listed twice: The respective cheque has already been received by the Paying Bank and paid. This mistake happens when the same cheque is presented once in CTS and the 2nd time in MICR Clearing. Or, the same cheque is presented twice in CTS.


  • Paper not received: The paying banker is supposed to receive the Paper cheque, but it has not been received.

In all the above cases, it is the responsibility of the Presenting banker to take action. Ideally, the customers should not get ‘return cheques’, with the above reasons.