“LIC ONCE AGAIN SHOWS A STUNNING PERFORMANCE IN A COMPETITIVE MARKET''
Face2News/Chandigarh
The All India Insurance Employees' Association (AIIEA) is the largest aoldest trade union in public sector insurance industry. The AIIEA represents around 85 per cent of employees in the UC and Public Sector General Insurance Companies throughout the country. Protecting and strengthening public sector insurance industry while taking care of the interest of the employees has been the basic objective of the AIIEA.
(MOREPIC1)(MOREPIC2)(MOREPIC3) The AIIEA is happy to note that the UC has closed its books for the year 2022-23 with yet another remarkable performance. The information available so far suggest that UC collected a record first year premium income of Rs.231893.07 crore recording a growth of 16.75%. It garnered Rs.58632.08 crore through Individual business and a record Rs.173261 crore through Group business. It sold 24050015 policies. This remarkable performance has come in the background of a very tight macro-economic environment and budgetary proposals completely antithetical to the interest of the industry.
The UC is the premier public sector financial institution in the country. UC has Rs. 44 lakh crores of assets under management. Even after 22 years of competition, UC lords over the life insurance industry as the market leader with over 70 per cent market share.
The claims settlement ratio of the UC is one of the best in the world. Despite this sterling performance,
attempts are being made by the government and the regulator of the insurance industry, the IRDAI, to bring in certain policy changes which would adversely affect the interests of the UC.
There are reports that the government would table a Bill to further amend the Insurance Laws in the Monsoon Session of the Parliament. Through these amendments, the government intends to change the minimum capital requirement, commission structure and allow issue of composite licenses.
In simple words, the government is taking the insurance sector to the pre 1956 era which would make this sector vulnerable to fraudulent practices endangering the savings of the people. The IRDAI is also planning to crowd the market by announcing that it is likely to issue licenses to nearly twenty more companies both in life and non-life business.
The government and the IRDAI have been arguing that there is a need for greater insurance penetration and every Indian should have an insurance policy by the year 2047. But it has to
be realised that insurance penetration cannot be increased by merely crowding the market with a large number of players. Insurance penetration essentially depends on the level of disposable income, which is unfortunately rather low in India.(SUBHEAD)
Besides, some of the actions of the government and the regulator are bound to belie their expectations. The government has in the recent budget made it clear that it intends to migrate to an exemption-free tax regime. The new tax regime proposed by the Finance Minister offers no incentives for savings. The insurance industry has for years, been demanding, for raising limits and introducing a separate tax incentive under 80 (C) to make insurance products attractive.
The industry was also demanding for withdrawal of GST on life and health insurance premium. The imposition of GST on life and health premium is not only unjust but also unethical seen in the context that Indian constitution makes the right to dignified life and health a fundamental right. Rather than giving any concession to promote the industry, the government has imposed fresh taxes on high premium policies. Surely, this will have a long term impact on the industry.
The AIIEA therefore calls upon the government and the regulator to reconsider these ill conceived decisions in the interest of public sector insurance industry and the people of India at large. The AIIEA demands that there should be immediate recruitment of Class Ill & IV employees in the UC, including a special recruitment drive in Jammu & Kashmir, so as to bring about further improvements in customer servicing and give some relief to the unemployed youth of the country.
The AIIEA profusely thanks the millions of policy holders of UC and the people of India at large for their unequivocal support to the UC for all these years.
