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This is with reference to "Insurance — Secure Future" (Business Line, September 22). It was surprising to see that there was not a single mention about LIC — the world's number 1 insurer in the public sector.

Moreover, it was mentioned that for 2001-2002 the overall new business premium income had declined by 18 per cent due to the fall in LIC's first premium earnings by 24 per cent. It was also stated that the new premium income of the 12 insurance companies had trebled in the previous year.

As per IRDA's information — the regulating authority — LIC's business is 92.03 per cent of the total business for the year 2002-03, while all the other 12 companies jointly did only 7.97 per cent.

As you know insurance is a long-term contract, and the success and reliability of a company depends upon its financial creditworthiness of fulfilling its assurances. I would like to bring your attention the comments of the international rating agencies such as Fitch, Standard and Poor about the 12 foreign Insurance companies that are doing business in collaboration with Indian partners. The agencies had slashed and downgraded these companies, and they — due to negative returns — cut bonuses and payouts to policyholders in their countries.

Due to pressures on solvency margins, the companies also closed their doors to new business. In India too, they had cut the promised guaranteed returns. But LIC achieved a landmark that cannot be surpassed by the others — it settled 99.7 per cent of its maturity claims. This is a world record.

These private insurance companies are concentrating only on the areas and businesses that are profitable and the IRDA's stipulations on rural and social sector are neglected.

S. Meena Kumari

Tirunelveli

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