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EXPRESSING ITS displeasure over any potential move by the government to increase privatisation in the insurance sector, a unit of All India Insurance Employees Association (AIIEA) on Sunday organised a press conference in Chandigarh, where it questioned government’s policies related to the insurance sector.
AIIEA stressed that the central government might table a Bill in the upcoming Monsoon session to amend the insurance laws to change the minimum capital requirement, commission structure and allow issue of composite licences.
“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 association said.
It also said that the regulator Insurance Regulatory and Development Authority of India(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 insurance businesses. However, AIIEA highlighted, that the government and IRDAI’s plan to give every Indian an insurance policy by 2047 does not mean merely crowding the market. Insurance penetration essentially depends on the level of disposable income, which is unfortunately rather low in India, the union added.
It also criticised the central government for the Union Budget over its intention to migrate tax payers to an exemption-free tax regime. “The new tax regime proposed offers no incentives for savings. The insurance industry, for years, has been demanding 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,” AIIEA added.
The imposition of GST on life and health insurance 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, the association said.
The AIIEA called upon the government and the insurance regulator to reconsider these ill-conceived decisions in the interest of public sector insurance industry and the people of India at large. It also laid emphasis on the fact that there should be immediate recruitment of class 3 and 4 employees in the LIC, including a special recruitment drive in Jammu and Kashmir, so as to bring about further improvements in customer servicing and give some relief to the unemployed youth of the country.
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