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Insurers factored in Salman Khan's likely arrest; denied non-appearance cover for his shoots

MUMBAI: Insurance is the art of factoring in the probability of an event and then taking a call on it.

And, when it comes to actor Salman Khan — he was convicted and sentenced to five years rigorous imprisonment in a 2002 hit-and-run case on Wednesday — the industry seems to have stayed ahead of Bollywood.

And, when it comes to actor Salman Khan — he was convicted and sentenced to five years rigorous imprisonment in a 2002 hit-and-run case on Wednesday — the industry seems to have stayed ahead of Bollywood. 

The judiciary may have taken 13 long years to come up with its verdict on Khan, but insurers had factored in his possible arrest while insuring his movies. In fact, insurance companies had denied non-appearance cover for the actor in case he didn't turn up for his shoots.

Analysts reckon that Rs 200 crore is riding on his unfinished films, Dabangg 3 and Prem Ratan Dhan Payo. Insurers also said that they would not honour third-party claims since Salman was driving without a licence and w .. 

Insurance policies do not pay third-party motor claims when the person who is driving is under the influence of alcohol. "Salman Khan was driving without a licence and insurance policies do not kick in such a case," said a senior executive of a general insurance company.

Two of his films which are nearing completion — Kabir Khan's Bajrangi Bhaijaan and Suraj Barjatya's Prem Ratan Dhan Payo — would be the worst affected, but would not raise any claims.

"Insurance companies would not insure actors accused in criminal acts," said Sanjay Datta, head of insurance ICICI Lombard.

"Insurance companies would not insure actors accused in criminal acts," said Sanjay Datta, head of insurance ICICI Lombard.

Insurance companies charge a premium of up to 3-5% of the sum assured, which depends on the Budget of the film.

Production houses, which are trying to bring in professionalism into the film industry, have started buying insurance cover for their ventures. So, in case of a cancellation or postponement, an insurance company reimburses the losses.

"Other than traditional event cancellation cover, insurance companies insure losses arising out of trouble in movie release in certain cities," said the executive.

"This cover was introduced in Fanaa, which could not be released in Gujarat," said the executive. 

How Much Is Kim Kardashian's Butt Worth?

Kim Kardashian has allegedly insured her butt for $21million.

The Keeping Up with the Kardashians star is famous for her killer curves, which include a pert bottom that she often shows off in figure hugging clothes.

And sources say that Kim's fiancé Kanye West thought her behind was so important, it deserved its own insurance policy.

"People have always been obsessed with Kim's bottom. Kanye encouraged her to take out the policy to safeguard it in future," an insider divulged to British magazine Grazia.

And it isn't just Kim who's considering safeguarding one of her best assets.

Kanye, who's due to wed Kim later this year, is reportedly also taking steps to look after his voice.

"He is currently in the process of having his voice insured, but thinks it is worth far more than any valuations he's been offered yet.

"Kanye got their broker to value Kim's bottom. Various factors were taken into account, including how much her work is based on her behind and how it would be impacted if it were to be damaged," the source added.

Kim isn't the first celebrity to take measures in insuring a body part.

Reports surfaced in 2006 that David Beckham insured his body for £100million.

Dolly Parton supposedly covered her breasts for $600,000 while Mariah Carey reportedly thought her legs were worth a cool $1billion.

Kim has openly talked about her killer curves in the past, and finds it slightly odd that people are so fascinated by her backside.

"It's kind of weird that people are obsessed with [my bottom] but I embrace it. It's flattering," Kim previously said

Prospect of separate Scottish tax regime stokes business alarm

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Directors of Standard Life are preparing to issue a coded warning next week on the dangers of Scotland’s tax regime diverging from the rest of the UK as business leaders fret over the fallout from the Scottish National party’s landslide victory.

While executives and investors in much of the UK cheered the victory of a business-friendly Conservative government, their counterparts in Scotland were warier of the outcome after the left-leaning SNP won 56 out of 59 seats north of the border.

• Directors at Standard Life, the FTSE 100 insurer, are expected to highlight the importance of retaining a “single market” in UK financial services at the insurer’s annual meeting next week, City sources said, although the comments are likely to be carefully worded.Several business and financial services leaders raised concerns about the chances of a more onerous, more fragmented and more complicated tax regime. David Cameron pledged on Friday to hand Scotland “important powers” over tax.

Standard Life declined to comment on Friday.

Douglas Connell, senior partner at Turcan Connell, one of Edinburgh’s best-known legal firms, said: “In Scotland there is a leftwing agenda that may now be part of the culture. The long-term direction of travel is that Scotland will become a more highly taxed country.”

Alasdair Humphery, an Edinburgh-based director at the property group JLL, said: “It’s difficult to see how a second referendum isn’t closer than it was when this election campaign began. Uncertainty over the future of the union will once again create some hesitation over investing in Scotland.”

• Publicly, business groups including the CBI struck a neutral tone on the SNP’s success, with some executives saying the prospect of Britain leaving the EU was a bigger concern.

But even though the SNP will not be in power in Westminster, some Scotland-based financial services groups that serve customers across the UK are nervous at the possibility of diverging tax regimes for pensions, savings and investments.

Owen Kelly, chief executive of Scottish Financial Enterprise, which represents the financial services industry, said full-blown fiscal autonomy for Scotland could “raise some of the questions that came up in the independence referendum”.

A wholesale transfer of tax powers would be likely to have “clear consequences for business. They’d have to serve two separate markets, and that would be more costly for customers.” However, he added: “We’re going to wait and see how things pan out.”

One senior Edinburgh-based banker put it more bluntly. He said the “unholy alliance” of the Conservatives and SNP was “a nightmare outcome if you are a Scottish unionist”.

However, Barney Reynolds, head of financial institutions advisory at the law firm Shearman & Sterling, said that compared with the potential implications of a Yes vote in the independence referendum last year, the SNP’s Westminster gains were a “very small deal” for the sector.

“It clearly affects the political backdrop, and that in time could lead to other things, but for now it’s not something that affects financial services location per se.”

Alastair Ross, an Edinburgh-based public policy expert at international law firm Pinsent Masons, said claims that the SNP was “anti-business” were ill-founded. “The party’s track record in Holyrood shows it’s keen to work with business,” he said.

He added that neither London nor Edinburgh could “afford to be dragged into continual dispute. They need to demonstrate that the UK [including Scotland] remains a viable and attractive market place for investment”.

FUNCTIONS AND BENEFITS OF INSURANCE

Insurance has many functions and benefits, some of which we may describe as primary and others as ancillary or secondary, as follows:

•  Primary functions/benefits: Insurance is essentially a risk transfer mechanism, removing, for a premium, the potential financial loss from the individual and placing it upon the insurer. The primary benefit is seen in the financial compensation made available to insured victims of the various insured events. On the commercial side, this enables businesses to survive major fires, liabilities, etc. From a personal point of view, the money is of great help in times of tragedy (life insurance) or other times of need.
• Ancillary functions/benefits: Insurance contributes to society directly or indirectly in many different ways. These will include:              

 (i) employment: the insurance industry is a significant factor in the local workforce;  

(ii) financial services: since the relative decline in manufacturing in Hong Kong, financial services have assumed a much greater role in the local economy, insurance being a major element in the financial services sector;

(iii) loss prevention and loss reduction (collectively referred to as ‘loss control’): the practice of insurance includes various surveys and inspections related to risk management (see 1.1.3(b) above). These are followed by requirements (conditions for acceptance of risk) and/or recommendations to improve the ‘risk’. As a consequence, we may say that there are fewer fires, accidents and other unwanted happenings;  

(iv) savings/investments: life insurance, particularly, offers a convenient and effective way of providing for the future. With the introduction of the Mandatory Provident Fund Schemes in 2000, the value of insurance products in providing for the welfare of people in old age or family tragedy is very evident;

(v) economic growth/development: it will be obvious that few people would venture their capital on costly projects without the protection of insurance (in most cases, bank financing will just not be available without insurance cover). Thus, developments of every kind, from erection of bridges to building construction and a host of other projects, are encouraged and made possible partly because insurance is available.