“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 disposal income, which is unfortunately rather low in India,” Mishra said.
At the same time, he also said the country’s insurance penetration is higher than in even some of developed nations and credit for this goes to LIC and general insurance companies in the public sector.
The All India Insurance Employees’ Association general secretary told reporters here that AIIEA is the largest and oldest trade union in the public sector insurance industry and represents around 85 per cent of employees in LIC and public sector general insurance companies throughout the country.
Protecting and strengthening the public sector industry while taking care of the interest of the employees has been the basic objective of AIIEA, he said.
“LIC has closed its books for the year 2022-23 with yet another remarkable performance…recording a growth of 16.75 per cent. It garnered Rs 58,632.08 crore through individual business and a record Rs 1,73,261 crore through group business.
“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,” he claimed. Mishra said that LIC is a premier public sector financial institution in the country and has Rs 44 lakh crore of assets under management and commands over 70 per cent market share with its claims settlement ratio being one of the best in the world. “Despite this sterling performance, attempts are being made by the government and IRDAI, to bring in certain policy changes which will adversely affect the interests of LIC.
“There are reports that the government would table a bill to further amend the insurance laws in the monsoon session of Parliament. Through these amendments, the government intends to change the minimum capital requirement, commission structure and allow issue of composite licences.
“Plainly put, the government is taking the insurance sector to the pre-1956 era which will make this sector vulnerable to fraudulent practices endangering the savings of the people. IRDAI is also planning to crowd the market by announcing that it is likely to issue licences to nearly 20 more companies both in life and non-life business,” he claimed.
Mishra said the Centre has in the recent budget made it clear that it intends to migrate to an exemption-free tax regime.
“This 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 is also demanding withdrawal of GST on life and health insurance premium, which 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,” he said.
He said AIIEA 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”.
Meanwhile, he said the number of LIC policy holders has grown from 12 crore to 40 crore in the last ten years. However, during this period, 20,000 employees have retired.
In northern zone, in J&K no recruitment has taken place for last 20 years.
He said AIIEA also demands that there should be an immediate recruitment of Class III and Class IV employees in the LIC, including a special recruitment drive in Jammu and Kashmir.