File picture of LIC workplace.
| Photo Credit: Nagara Gopal
The All India Insurance Employees’ Association (AllEA) normal secretary Shreekant Mishra on May 7 stated that regardless of the sterling efficiency of the Life Insurance Corporation (LIC), makes an attempt have been being made by the Central Government and the regulator of the insurance coverage trade, the Insurance Regulator Development Authority of India (IRDAI), to usher in sure policy changes which would adversely have an effect on the pursuits of the LIC.
Vulnerable to fraud
Addressing a press convention right here, Mr. Mishra stated the federal government was likely to amend the insurance coverage legal guidelines, and thru the amendments, anticipated to alter the minimal capital requirement, fee construction and permit difficulty 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,” he stated.
“Surely, this will have a long term impact on the industry”Shreekant MishraGeneral secretary, All India Insurance Employees’ Association
“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,” he stated.
“Insurance penetration essentially depends on the level of disposable income, which is unfortunately rather low in India. Besides, some of the actions of the government and the regulator are bound to belie their expectations,” he said.
Exemption-free tax regime
Mr. Mishra added that the federal government had, within the current Budget, made it clear that it supposed emigrate to an exemption-free tax regime.
“The new proposed tax regime 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,” he stated.
“The industry was also demanding for the withdrawal of the 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 the Indian constitution makes the right to dignified life and health a fundamental right,” he said.
“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,” he added.
