Skip to main content

RERA Creates a Rs10k-cr Business for Cover Firms

By
RERA Creates a Rs10k-cr Business for Cover Firms
 
TITLE INSURANCE for all projects was made compulsory for builders under the Realty Act
 
The Real Estate Regulatory Act (RERA) has made it compulsory for developers to get title insurance for all projects, opening a new segment of over Rs 10,000 crore for insurance companies.
 
Insurance companies have so far not covered land transactions and they say the reason for missing cover is unreliable land records, which can be challenged.
 
After the implementation of Rera, it is mandatory for developers to provide written affidavit to the buyer stating that the legal title to the land contains legitimate documents of ownership. This policy covers buyers of property against loss and settlement costs, litigation funds arising from problems in the land title discovered after purchase. HDFC Ergo and SBI General are working on launching title insurance policy.
 
“As per Rera, every builder will have to buy title insurance and we expect the entire potential in terms of premium to be ?10,000 crore,” said Anurag Rastogi, member of Executive Management - HDFC Ergo. “Demand has always been there but there was no regulatory requirement.”Sum assured for title insurance will be the value of the property. Five -six large builders have shown interest in buying title insurance to cover loss of property and cover the legal expense in case of faulty land records.
 
Given the lack of records, title insurance may not become a big segment just yet.“Most land records and manuals and are yet to be digitalised. The ecosystem is yet to mature and given the existing problems with land records, implementation of title insurance could still be difficult and could take up to two-five years for Rera to be fully implemented nationwide,” said Pushan Mahapatra,CEO, SBI General Insurance Company. “Large developers, financiers would like to buy title insurance.”
 
Mostly, it will cover issues arising out of forgery and fraud or claims arising out of documents not created properly. Interestingly, if property value appreciates, the policy will increase the limit of indemnity.
 
The Economic Times, New Delhi, 27th March 2018 

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more