The Hindu Business Line : Govt wants insurers to improve rural coverage

PUSH TO RURAL HEALTH INSURANCE: Mr C.S. Rao (right), Chairman, IRDA, and Prof David Dror, Erasums University, Rotterdam, at an international conference on micro health insurance in the Capital on Wednesday. - Kamal Narang

New Delhi , Nov. 1

The Government today asked insurance companies to set targets and work towards providing health insurance cover to the priority sector - rural and other deprived sectors.

Inaugurating the international conference on `Micro Health Insurance: Developing Pro-Poor Health Insurance in India', the Minister of State for Finance, Mr Pawan Kumar Bansal, urged insurance companies to voluntarily provide a certain per cent of insurance to such sectors, similar to the commitment made by the banking companies.

Banks have extended 40 per cent of their total credit to the priority sector to achieve financial inclusion. At the conference organised jointly by FICCI and Erasmus University Rotterdam, University of Cologne with the support of the European Commission, the Minister said, ``Insurance companies should come forward for setting targets for this priority sector and they should start with health insurance.''

The Minister also said that suggestions were welcome on the Government's role of a facilitator to make health insurance affordable to the poor. Mr Bansal emphasised the need for creating awareness amongst the poor of the health insurance imperative and advised insurance companies to devise customised value-added products for community, groups and individuals.

Mr Bansal asked the Insurance Regulatory Development Authority (IRDA) to urge all the stakeholders to come together and involve self-help groups and panchayati raj institutions to act as instruments of change for making the micro insurance experiment work.

Micro health insurance

In his address, Mr C.S. Rao, Chairman, IRDA, said access to micro health insurance was the key challenge and insurance companies would have to enrol a large number of agents for reaching out products to the poor. He expressed satisfaction that the need for regulatory action on this front was now recognised and said the insurance companies were now looking at the expanding opportunities and contemplating setting up of standalone health insurance companies.

One company was already into standalone health insurance, Star Health Insurance, and another would come up soon, he said. The Apollo Group and German-based DKV Group have applied for licence to set up a standalone health insurance company in India.

The regulator plans to suggest insurers to provide insurance to the priority sector depending on their years of operation and market share, he said. "Though it will not be mandatory for insurers, those who will not provide priority sector insurance coverage may be penalised," IRDA chairman stated.

Asked whether the insurance companies would be allowed to invest in SEZs, Mr Rao said there are two aspects to it, while setting up of power plant within SEZs is eliglible for insurance cover, as it is part of infrastructure, development of SEZs is not covered. On the growth of the insurance industry, the regulator said, life insurance is growing by 35 per cent on an average while non-life by 15 per cent. Motor and health insurance are growing fast, he said.

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