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BOOST TO THE INSURANCE SECTOR WITH 37 COMPANIES IN THE FIELD
: NEW PENSION SYSTEM LIKELY TO BE OPERATIONALIZED BY MAY END
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The Economic Survey 2007-08 says, the number of participants in the insurance sector has gone up to 37 from six insurers in the year 2000 in the life, non-life and re-insurance segments. This includes specialized insurers, viz., Export Credit Guarantee Corporation; Agricultural Insurance Company and two stand along health insurance companies. Of the 17 life insurance companies, as many as 15 are in joint venture with foreign partners.
In the Life Insurance Industry, the first year premium underwritten during the period under report was Rs.44,696 crore as against Rs.44,073 crore in the corresponding period of the previous year. The total premium underwritten by the industry has grown from Rs.34,898 crore in 2000-01 to Rs. 1,56,041 crore in 2006-07.
During the current year, the non-life insurers underwrote premium of Rs. 18,509 crore during April to November 2007 as against Rs. 16,560 crore in the corresponding period of the previous year. Post-de-tariffing, while the growth in premium has slowed down on account of reduction in rates, the number of policies underwritten has shown an increase.
The Economic Survey says the IRDA has carried forward the process of detariffing of the general insurance sector, creation of the motor pool effective April 1, 2007 during 2007-08. Several policy initiatives were taken in the insurance sector during 2007. These include, de-tariffing of the general insurance industry, obligations towards the rural and social sectors and micro insurance.
With a view to synergizing the efforts of all State Governments which are promoting the poverty alleviation programmes, the IRDA has requested the State Governments to publicize the concept of micro-insurance through their various agencies. As per data available (as on February 1, 2008) approximately 2.85 lakh employees were covered under the NPS. An amount of approximately Rs.1,177 crore, including the Government contribution and interest component has been credited into the pension account. Nineteen State Governments have also notified similar schemes for their new recruits.
The Pension Fund Regulatory Act Development Authority (PFRDA) has appointed three sponsors for pension funds for managing the corpus under the New Pension System for the Government employees after due consideration. The entire architecture of the NPS is expected to be operationalized by May 31, 2008. The Economic Survey says that the growing importance of insurance and pension funds would provide impetus and broaden the horizon of the Government securities market.
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