Part 2

UIIC AO 2016 Descriptive e-Magazine Part 2

Essay: Western Rating Firms are Sometimes Biased Against Emerging Nations Yogita
Credit rating Agency (CRA) are specialist commercial firms that assesses the liabilities of companies,
institutions and government to service their debts. CRAs are not absolute predictor but give subjective
view regarding credit worthiness of companies.
International rating agency is mainly dominated by Moody, Standard & Poor and Finch. Of lately, rating
agencies have seen duopoly or oligopoly by these rating players. As these rating agencies are based and
controlled by western world and governments, we have seen them being partial towards developing
nations. CRAs have time and again come under scanner for their biased and erroneous ratings. They had
rated Lehman and Brothers an 'A' rating, a month before its collapse. In past, collapse of several other
corporate giants triggered a series of questions on role & credibility of CRAs. It is believed that their
revenues are predominantly driven by rating fees earned from issuers.
It is quite apparent that as emerging nations are in the process of development they cannot earmark funds
to up their rating. This results in developing nations not getting ratings as per their performance and
growth. It has been seen that CRAs denote disproportionate resources in rating western countries, rather
than improving their analysis of emerging nations. Rating agencies have also been blamed for contributing
to economic turbulence by underestimating the risk attached with the bigger economies of the worlds.
The reasons for such performance of rating agencies are due to several factors. First of all they are not
independent bodies and have sufficient influence on their decision makings from the government and big
companies who also have been suspected of paying to maintain/increase their rankings. Second, they
have not been held accountable for their faulty predictions in the past.
CRAs wield enormous power as gatekeeper to financial markets for companies due to increase regulatory
use of ratings. There is a need to strengthen the accuracy of credit rating agencies and make them more
unbiased towards emerging economies. There should be a regulatory authority to rank on the basis of
their accuracy to rate. Lastly, they should also be held accountable for their faults and inaccurate ratings,
making sure there is less government interference in their decision making.

Letter: Letter to editor about children's health and education issues in India Arya Stark
Arya Stark,
26, Phulchand Niwas,
NDA Road, Mumbai-400006.
31st May, 2016

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To,
The Editor,
The Indian Express,
Mumbai-400001

Subject- Childrens health & education problems in India.

Dear Sir/Maam,
As a child right activist, I am greatly concerned about the childrens development issues. Though the
standard of living of our countrys citizens is improving day by day, but we used to see many children
begging on the streets daily. It shows that governments schemes and awareness camps are not yet reach
everywhere. Still, many children are facing problems like malnutrition, hunger, etc. and fighting many
diseases without getting any medical help. Lack of sanity and lack of clean drinking water are the main
sources to affect the childrens health.
Along with the health issues, education to every child is another major concern. Today also, there are
many children out of the school. In the rural areas, people are not still so concerned about the education
and especially girl childs education. Free basic education programmes have been launched few years ago,
but the lack of awareness of the importance of education left the children out of school. In the cities, the
rising cost of education is the biggest worry of the parents. If the child is not healthy, naturally it is going
to affect its other developmental activities. The lack of education later leads to poverty and poverty
ultimately goes to degrade the health. And the cycle continues.
Children are citizens of tomorrow. The healthy and active children are going to become development
force to the nation. Only providing food is not the solution, proper food diet containing nutrition, vitamins,
proteins, fibre is required. Also, better education is the key to progress of children. Through this letter I
want to draw your attention to these issues, so that through this medium we can spread the awareness
among the people.

Yours faithfully
Arya Stark

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Essay: Future of Insurance in India Arya Stark

To become a developed nation, India must financially empower its large population. A key element of this
empowerment is a base risk cover that covers the elements of life, disability, health, moreover, vehicles,
crops, property, high value products, etc. This empowerment can only be achieved through efforts of
government, private entities and regulators, who must be able to build commercially viable and scalable
models for financial inclusion.
The key issues and challenges resisting the growth of insurance sector in India are product design, market
conduct, distribution intermediary and complaints of management. Also in the rural area, lower access to
information, lack of awareness of insurance products makes the people uninsured class of population.
Insuring people in the informal sector is a challenge, as there is a vast population working in the informal
sector accessing them is not easy.
It is time to use some innovative techniques for the expansion of the insurance industry. For that, it is
need to create new innovative models. There are successive models in other financial and non-financial
service business that can be adopted to distribute the insurance products. Such as adopting social
insurance or peer to peer insurance model. A Berlin based start-up is essentially allowing individuals to
develop their own risk pools. Users of service invite their friends to cover a small portion of any claims
that are made and the rest of the claims are paid by a conventional insurance policy. This service, claimed
by company, prevents insurance fraud and misconduct via means of social control and reduces sales cost,
discourages small claims and cuts administrative overhead.
Implementation of direct delivery model inspired by Amway success of multilevel marketing can be
beneficial to insurance sector too. Then mobile based insurance model, extending the business
capabilities to mobile devices has quickly become a fundamental requirement for companies. As mobile
users are already KYC compliant and with Aadhar enabled bank accounts. Mobile banking platform to
offer insurance solutions is a cost effective method to tap a large market. In areas like information
aggregation and management, communications and human machine interfaces, technology has enabled
new paradigms. Use of technology benefitted to the growth of industry and coupling the insurance
products with technology from time to time will assure growth in future also.
In future, there will be always need to find out new measures which will increase the penetration of
insurance products in our country which can be achieved through focused efforts and suitable
partnerships across the industry and government bodies. The insurance industry still struggles to move
out of the shadow cast by the challenges posed by the economic uncertainties. The strong fundamentals
of the industry can make a way for sustainable long term growth.

Letter: Write a letter to your friend expressing your views on rise of gadget insurance in India Priyanka
Prateeksha
IRC Village
Bhubaneswar-756381

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2nd June 2016

Dear Supreeya,
Sorry to hear about loss as the phone was close to your heart, but anyways, now you can take
some smart steps and then you dont need to worry about your gadget loss. Have you heard about gadget
insurance? I want to share something about that with you.
As you know insurance is very important for all of us. Gone are the days , when people used
to get insurance policies of life and death only, but todays scenario has totally changed. Nowadays people
get insurance policies of every single thing they possess.
So, one of them is gadget insurance. It is a specially designed policy to protect against loss,
damage or theft of all of your gadgets. It isnt until something happens that we realize the value of
protecting these valuable devices. With the help of gadget insurance, you can get complete security and
protection against the accidental damage, damage due to fluid or water, damage due to fire or theft. They
also provide antivirus solution for your gadgets, here the insurance claims are based on the number of
days and usage of the gadget. In gadget insurance you can easily get maximum benefits and get your
precious money back from the insurance companies simply by enrolling for gadget insurance.
So, I hope this awareness will help you to have better protection of all your gadgets. Give my
regard to all.
Yours faithfully,
Prateeksha

Essay: Role of Insurance Aggregators in Insurance Sectors Ghost

Those of us who spend much of our time browsing the internet, would have noticed the advertisements
from Insurance Aggregators now-a-days. As per the definition of the Insurance Regulatory and
Development Authority of India (IRDAI), Insurance Web Aggregators compile and provide information
about insurance policies of various companies on a website. They collect data from various sources and
databases, such as insurance company websites, and compile them to make presentable to potential
insurance policy buyers. Since these web aggregators have gained prominence in India, the Insurance
Regulatory and Development Authority has brought about a set of regulations for these aggregators.
Insurance Regulatory and Development Authority (Web Aggregators) Regulations, 2013 define the role
and duties of such aggregators.
This set of regulations define the process of attaining a license to act as a web aggregator, norms and
regulations, penalties for aggregators working without a license and other related matters. As per the final
regulations of IRDA which have been finalized in 2016, the insurance web aggregator can be reimbursed
by charging a fee of Rs.50,000 from the insurer for each insurance policy or product. While performing its
duties, an insurance web aggregator has to ensure that no inconvenience is caused to the customer. It
can act as an insurance broker or solicitor.

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Insurance is a large growing market. Various estimates say that there would be 450 million internet users
by 2020. Using this internet the insurance web aggregators have made life so much more convenient for
busy buyers today and have helped raise the insurance industry of the country to an all-new high. The
insurance industry has increased multiple-fold post the introduction of insurance web aggregators in the
market.

Essay: Indian Government should be smarter, not strict on KYC norms Priyanka
KYC is a major tool used to verify the identity of the clients of an organization, be it banks, corporate
houses or insurance companies. This is a process to ensure that the proposed customers, clients or
distributers are reliable and truthful.
Know Your Customer is becoming very important globally to combat terror financing, money laundering,
financial fraud and identity theft. The objective of KYC procedure is to detain banks and companies from
involving in unlawful and illegal activities intentionally or unintentionally.
In India, RBI introduced the KYC guidelines for all banks in 2002. However, in 2004, RBI made it mandatory
for all banks to be fully equipped with KYC norms by Dec 31st 2005. Some key features of KYC guidelines is
proper verification of the identity provided by the customer, monitoring the customer transaction,
ensuring that he is not involved in any fraudulent activities.
However, in some cases, despite using all these rules and regulations, some banks and companies are
being cheated. What lack are proper coordination among banks or companies, using modern technologies
to track customers, unavailability of quality and acute information and easy acceptance of customers.
So, the process needs to be relevant, effective and measurable. One effective way to strengthen KYC and
to make the process more transparent is to follow digital route and implement e-KYC. e-KYC means that
KYC exercise is conducted entirely through internet using an Aadhar interface provided by UIDAI and Pan
card interface provided by Income tax department. Banks and companies before accepting customers
should evolve a Customer Acceptance Policy i.e. application of Customer Due Diligence (CDD). No account
should be opened in anonymous names or when the identity of the customer matches with the person
involved in illegal activities, new customers should be accepted only after CDD.
So, by adopting all these features banks and insurance companies can have safe transactions and can help
them build good image in market. Moreover, with the help of the improved KYC norms, we can have a
society free of fraudulence.

Essay: INDIAN AGRICULTURE NEEDS ORGANIC REVOLUTION Domino

Agriculture is the backbone of civilization. The entire nation depends on the agriculture of the country for
a proper sustenance and one of the major sectors in India is agriculture. Hence, looking for a sustainable
source of agriculture is mandatory as far as our country is concerned. Organic farming serves the purpose
best as it involves farming techniques which excludes use of manmade fertilizers or pesticides and rather
uses animal or plant manure, biological pest control, etc.

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The conventional farming methods apply the use of fertilizers and pesticides which have harmful effect
on the crop produced. The chemicals harm the activity of the nitrogen-fixing bacteria in the soil which
have adverse effect on the crop yield. The chemicals bought requires quite a huge sum of money for which
the farmers applies for loans and if the crop yield is less it becomes difficult for the farmers to repay the
debt. In addition to the grievances, climatic disputes like drought are always prevailing in our country
elevating the need for organic farming.
The organic farming methods help in enriching the soil. The agricultural by-products are reused and the
waste is minimized. Biological pest control and bio- pest repellents works more than fine in combating the
pests. Another main feature of organic farming is the use of pure breed seeds rather than hybrid ones.
The genetically modified seeds, which are avoided in organic farming, carry health risk. So, a safer food
product is obtained through organic farming.
India needs Organic Revolution as the main aspect of a nations prosperity is health. Organic farming
produces food materials which are less hazardous and more sustainable. The export market is also facing
issues as the food materials produced in India is found to be having pesticides in larger quantities by the
importers of other countries, especially the European countries. A lot of work has to done in the grassroots
level to bring in the Organic Revolution. First of all, awareness campaigns have to be held. The farmers
need to know the benefits of organic farming which can be taught to be them by skilled trainers. Secondly,
methods like rain water harvesting have to be promoted as India is facing major problems regarding
drought and other calamities which reduce the crop yield. It is the impeccable effort that has brought
change in the farming scenario in states like Sikkim. So, with efforts the entire country can bring about
the change too. A plant is a producer not a consumer. So, enriching the soil will enrich the plant and can
produce a nutritious hazardless yield.

Essay: INDIAN AGRICULTURE NEEDS ORGANIC REVOLUTION Ghost

Nowadays, pollution, use of chemical fertilisers and many uncertainties are accentuating the climate
change. Use of chemical fertilisers and pesticide in the farms not only affecting health but also it is causing
threat to the environment. That is why, there is rising concern over the world for shifting chemical farming
to the organic farming.
In India there is slow shift to the organic farming. Firstly, because of the lack of awareness about the
overuse of chemicals, intensive fertilisers and secondly, because of the perception that chemical farming
gives more produce than the organic farming. The organic farming produce less but only for the initial 3
years, but farmers are not aware of this.
The economy of any nation rests on the industry and agriculture. So it is required to focus on eco-friendly,
less chemo intensive farming which will produce healthy organic food and also it will not affect the
environment. With the farmers perception, more fertiliser will give more produce. But it is actually
affecting land, soil fertility and such chemically raised food become sources of health issues.
Even scientists, those are working in various science institutes and related to agricultural research agreed
to curb chemical farming and to promote organic farming. Indian farmers have some reasons to shift to

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organic farming. First, they cannot sustain longer through uneconomical chemical farming. Second, as use
of chemicals decaying the lands efficiency, so they will not have enough produce and that will not be
sufficient to pay back their loans. And third, as there is a big concern for organic food in the European and
other foreign markets, they say that our food contains too much pesticide. They insist for organic food.
This is affecting our exports, resulting in to losses.
Therefore, India needs to motivate organic farming among the farmers. Thats why, in 2016-17 budget,
government announced package of Rs.412 crore to focus on organic farming. It is also required to spread
awareness about organic food among consumers. The market link should be proper to sell the organic
food. Farmers must get reasonable price for the organic food, so that they will get encourage for organic
farming.

Letter: Write a letter to the newspaper editor on how Insurance companies need to raise awareness to
curb down rejection of claims Domino

Domino,
27, Russell Street
Delhi -400032
3-05-2016

To
The Editor,
The Hindu,
Delhi-400045
Subject: Insurance companies need to raise awareness to curb down rejection of claims .
Dear Sir/Maam,
I am a reader of your esteemed national daily and recently I have come across the various
predicament faced by several while claiming for the insurance they bought. It is rather sad to see
people suffer due to some negligence and loose trust over the Insurance companies, who have
little mistake in this situation.

Insurance is an essentiality which is bought by almost everyone to curb the sudden losses one
can face monetarily. There are several reasons on why an insurance claim gets rejected. One of

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the primary reasons is the fact that most consumers dont read the form and allows their
insurance agents to fill it up for them. This practice which can be termed as a malpractice has led
to forms being not filled properly. Places in forms are kept vacant which an insurance company
can easily term as non-disclosure of information. On the basis of this ground the claim can be
rejected. In fact the claims are mostly rejected as the person is not aware of the importance of
the process. Another prevailing mistake is lapsing of the policy. The claim has to be active in order
to settle it. The premium needs to be paid on time.
In addition, to the mistakes I have pointed out there is another icing on the cake. The consumer
generally forgets to update about the nominee. If a single man buys insurance and has his parents
as nominees; he should add his wifes name after his marriage. This is of utmost importance as it
is generally regarded after any misfortunate event it s upon his wife to look after his family.
The joe public faces issues only because of lack of awareness. If they are made more aware of
the processes and the importance of each step; the chances of a rejection of a claim will be
minimized. The thought of the entire process being cumbersome has to be eradicated by the
insurance agents or claim officers. The consumers have to accept buying insurance is essential
and hence, having patience to correctly go through the process is more important. There is no
substitute for the happiness of our loved ones. If the focus is shifted to rural areas where teaching
them about the importance of insurance and along with it the method to buy it will be of great
help as the impoverished are the ones who need insurance the most.

Yours faithfully,
Domino

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