Launch 'Jan Bima Yojna', widen insurance base: Irda to govt

Regulator says scheme should be on the lines of Jan Dhan Yojna

To increase awareness and deepen insurance penetration, the government should launch a “Jan Bima Yojana” on the lines of a similar programme launched for banking, Insurance Regulatory and Development Authority (Irda) Chairman T S Vijayan said on Monday.

“The Prime Minister should launch a “Jan Bima Yojana” in line with the Jan Dhan Yojana to increase the level of awareness among people on the importance of insurance. There is a need for concentrated efforts to make people aware about insurance,” Vijayan told reporters here at the 16th Ficci Annual Insurance Conference.

It may be recalled that just like banking, the country is also under-covered from an insurance point of view.

The Jan Dhan Yojana also has an insurance component wherein the account holders are being given personal accident cover.

On foreign holding caps in the insurance sector, Vijayan said allowing 26 per cent FDI in the life and non-life companies has upped the industry's growth to 3.9 per cent from the earlier 1.7 per cent.

However, he said that this growth rate of 3.9 per cent is not enough and there is a vast potential in the country as annually for the next 20 years about 25 million people will be entering the job market.

On the non-life front, the potential is huge as the vehicle ownership is growing by over a million every year, he pointed out.

“The 26 per cent FDI has been a success story. So many companies have come, collaboration has come and technology has come. For any investment we should look at if our legal and regulatory system can control it. We are quite capable of doing that. We should ensure that the deployment of money is as per regulations only, and any policy holder liquidity should be invested in India only,” he added.

Replying to demands from the industry to increase the FDI cap to 49 per cent, Vijayan said, "will 49 per cent FDI double the insurance penetration from 3.9 per cent to 7.2 per cent the industry has to reply.

"The insurance sector provides a huge potential for growth but we have to see if the policy holders or the country as a whole will be benefited with the FDI hike." The regulator also asked the insurance companies to protect the agents by fixing minimum wages for them and create employment opportunities in the industry.

"There should be some minimum protection for the insurance individual agents also. Companies should come forward to remunerate agents in terms of minimum wages of Rs 10,000 per month," he advised.

As of now there are 20 lakh agents in the insurance agents, both life and non-life, in the country.