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Regulator Irdai has asked insurance companies to file details of their business in the rural and social sectors, a move aimed at checking if they are fulfilling their obligations in these two areas.
It has asked life insurance companies to report the number of policies covered under the rural sector and the percentage these form in total policies written in a financial year.
With regards to the social sector, life insurers have to file details like the number of lives covered under the social sector in the reporting financial year.
General and health insurers have to file details on the amount of premium procured in the rural sector as well as how it compares with their gross premium. They are also to report details about their business in the social sector.
Irda (Obligations of Insurers to Rural and Social Sectors) Regulations, 2015 stipulates that an insurer has to furnish an annual certificate by the CEO or Principal Officer.
As per the regulations, 7% of polices written by a life insurer should be from the rural areas in its first year of business and gradually increase to 20% in the 10th year and thereafter.
In case of a general or health insurance company, 2% of gross premium should be from the rural areas in the first year and 7% in the 10th year.
Similarly, criteria for insurers in respect of social sector too has been defined by the Insurance Regulatory and Development Authority of India (Irdai).
'Social sector' includes unorganised sector, informal sector, economically vulnerable or backward classes and other categories of persons, both in rural and urban areas.