The Finance Ministry on Wednesday held a meeting with the heads of public sector insurance firms to discuss the implementation of Budget 2014-15 related announcements, including a pension scheme for senior citizens.
Financial Services Secretary GS Sandhu met heads of general insurance companies and lIC chairman on budget related issue, sources said.
There are 8 PSU insurers including the life Insurance Corporation of India, 4 public-sector general insurers, 2 specialised insurer, and the General Insurance Corporation.
Insurance penetration in India is low and there is need to expand this.
The NDA Government during its last term in office had introduced the Varishtha Pension Bima Yojana (VPBY) as a pension scheme for senior citizens.
“I propose to revive the scheme for a limited period from 15 August, 2014 to 14 August, 2015 for the benefit of citizens aged 60 years and above,” Finance Minister Arun Jaitley had said in the Budget speech last week.
Besides, he had said that the “benefits of insurance in India have not reached a large section of the people and insurance penetration and density are very low. The Government would work towards addressing this situation in multi-pronged manner with the support of all stake holders concerned”.
This would include suitable incentives, using banking correspondents, strengthening micro-offices opened by public sector insurance, he had said.
Besides, he had also said that “a National Savings Certificate with insurance cover will also be launched to provide additional benefits for the small saver”.At the meeting, the insurers demanded that they should be allowed to expand their micro-offices in hinterland and convert some of them into branches, to provide cover to the assets that are likely to be created by the proposed Rs 5,000-crore Rural Infra Development Fund (RIDF).
Heads of non-life insurance companies sought permission for appointing more persons, on the lines of the banking correspondents, at the existing micro-offices, a source told the news agency, requesting anonymity.
Currently these micro-offices are manned by single person. The insurers have also sought permission to open more such micro-offices, so as to make their presence pan-India. At present, the micro-offices only collect premiums from policyholders. However, insurers want the same offices to be able to settle claims.
The largest PSU general insurer New India Assurance has 1,000 micro-offices and is planning to open more, a senior official said.
These micro-offices will provide insurance cover to village offices, rural warehouses, cattle, poultry farms which would come out of the Rs 5,000-crore RIDF fund.
At the meeting, General Insurers Public Sector Association chairman G Srinivasan, who is the CMD of New India Assurance, made a presentation to the ministry, sources said.