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Serve the poor, reach the rural areas, PM urges insurance companies

Prime Minister Atal Bihari Vajpayee today said future insurance companies should show a sense of commitment and social responsibility by ensuring that their policies cater to every section of society.

Dedicating the ''Bhagyashree'' and ''Rajrajeshwari'' insurance schemes to the nation in New Delhi, Vajpayee expressed the hope that new Indian insurance companies would enter the market soon and compete with the existing players.

Vajpayee said the future insurance companies must compete with the existing players in providing better risk coverage to the well-off. At the same time, they must also compete in providing coverage to the poorest.

The Insurance Regulatory Authority Bill, which provides for opening up of insurance sector to private players, including foreign companies, is pending for introduction in the Lok Sabha. It provides for 26 per cent foreign equity in the sector.

The amended IRA bill, which incorporates most of the suggestions of the standing committee on finance, recommends that new insurance companies be forced to take certain amount of business for rural areas and for the socially deprived.

It also provides for strict penalties in case of failure to do so. Vajpayee's comments are to be seen in that context.

Launched by the General Insurance Corporation of India, the two new schemes are intended to improve the lot of the girl-child and women. The schemes have been launched as per Vajpayee's Independence Day announcement.

Vajpayee urged the states to collaborate with GIC and its affiliates in ensuring better delivery of these schemes.

Vajpayee said there is a big debate about insurance sector reforms. ''What is, however, forgotten is the contribution of existing players. They have expanded the insurance market and have provided risk cover to all kinds of businessmen and people," he said.

Vajpayee said educating girls is the most valuable investment that any country can make in its future. ''Thanks to GIC's hard work, more than 100,000 policies have already been sold,'' he said.

Finance Minister Yashwant Sinha asked the national companies to prepare for the future. They should be able to tackle any problem, he said. Sinha was referring to the impending competition from private and joint venture firms once the sector is opened up. He said more policies are required especially for rural areas.

Insurance strike:

In a separate development in Kerala, employees of the Life Insurance Corporation and the GIC will observe a strike, the day after the IRA bill is taken up for discussion in Parliament.

GIC Employees' Union South Zone president P Gopala Pillai said the bill would jeopardise the social security schemes which were mainly funded by public sector insurance companies.

He said the public sector insurance companies were generating profit and opening up of this sector to private companies would only lead to siphoning of the funds.

He also urged the Centre to put restrictions on the functioning of the IRA chairman Rangachari who is making policy statements even before the IRA bill was passed by Parliament.

UNI

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