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Udupi : All India Insurance Employees’ Union gave memorandum to Pramod Madhwaraj candidate for Udupi – Chickmagaluru Lok Sabha Constituency here at Udupi.

The All India Insurance Employees’ Association is the largest and oldest trade union of the insurance employees in India.  The AIIEA has been playing a very constructive role in the progress of the public sector insurance industry and helping it to successfully meet the social and national objectives.  You are aware of the magnificent contribution of Life Insurance Corporation in the nation building activity.  This institution has been mobilising small savings of the people and converting them into long term capital for infrastructure and social sector.  The National Policy on Health has also placed great reliance on health insurance to ensure that the citizens receive the financial security in case of unfortunate sickness.

In the past few years, insurance industry is going through a difficult period.  In order to help this industry perform to meet the nation’s expectations, the following measures are of immense importance.  The Country is going to elect a new Lok Sabha in the next two months.  As in the past your Party will place its vision for the development of country through its manifesto.  We will be very happy if these issues find reflection in your Party’s Manifesto.

1. Abolition of GST on Life and Health Insurance Premium

At present the risk portion of life insurance premium and the entire health insurance premium is being charged GST at the rate of 18%.  This is unfair considering the nature of the services sought. Life Insurance is to protect against the uncertainties of life and a tax at such a steep rate is totally unjust.  Similarly the GST on health insurance premium at 18% is equally unfair.  This is creating a situation where people are looking to other modes of savings denying themselves the coverage against the uncertainties of life and adverse health conditions.  We, therefore, request you to commit to abolish the GST on Life and Health Insurance Premium.

      2. Separate IT exemption limit for life insurance premium

The life insurance premium is bracketed along with other types of savings under Section 80 (C) of Income Tax Act.  Considering the uniqueness of the life insurance business, we request you to consider a separate exemption limit for the life insurance premium.

1. No to privatization of public sector insurance industry

The LIC and the Public Sector General Insurance Companies must remain 100 percent under the control of the government.  It has been historically proved that only where the State controls the peoples’ savings, they can be channelized to national development.  The control of private sector on domestic household savings will be for private profit maximisation. Considering the fact that our country is still a low income country, it is important for the insurance sector to remain a monopoly of the government for cross subsidisation and meeting the needs of the poorer and vulnerable sections of the population.  We, therefore, expect you to commit to retain the LIC and PSGI companies as 100 percent government owned.  We also request you to ensure that these institutions are given functional autonomy to meet the targets set for social and national objectives.

1. Withdrawal of Defined Contribution Pension Scheme

The above scheme is similar to the National Pension Scheme and is introduced for employees who joined the services of LIC and PSGI companies after 1.4.2010.  We are opposed to this scheme on the same lines the government employees are opposing the NPS.  Please commit to withdraw this scheme and allow the institutions to revert back to defined contribution and defined benefit Pension Scheme.

We are confident that our suggestions will be communicated to the President of your political party so that these issues concerning the public sector life insurance industry are incorporated in the Party Manifesto.