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Insurance cos� social responsibility remains untapped, says expert

By AJIT PATOWARY
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There is an urgency to harness the unexplored�potential of the insurance sector for extending support to a systematic disaster management programme, through its elaborate social welfare objectives for disaster mitigation and insurance coverage to the life and property of the victims of the disasters, including flood, earthquakes, etc.

This is the opinion expressed by noted insurance expert Kallol Kumar Dutta, the man who suggested a universal health policy for the entire population of the country and which ultimately helped the Union Government device the �Ayushman Bharat� scheme.

Talking to this newspaper, Dutta said that to address the recent flood-induced crisis experienced by the States and the huge loss of lives and infrastructure, �we need to create a systematic planning for outreach and dissemination of the insurance sector and its unique features of socially oriented�programmes.�

It is being felt that the lack of public interest and mobilisation for realisation of these programmes is primarily due to lack of awareness and insurance-educated citizenry in the nation as a whole, Dutta said.

Referring to Assam and the catastrophe caused by the recent flood in the State, he said that these devastations have been overlooked by the IRDAI (Insurance Regulatory and Development Authority of India). The regulatory body has been indifferent, keeping a facade of non-involvement and non-interference at this time of national calamity, he stated. It has refused accountability for its failure to question the responsibility of all the licensed insurance companies � both�the private and the public sectors � to fulfil their liabilities and compensate forthwith, as per their commitments that were registered when they were allowed to underwrite insurance business in India.

When the insurance sector was opened up to the private sector in year 2000, as per the amendment to Insurance Act, 1999, it categorically defined the focus of social welfare responsibility of private insurance companies to cover both rural and urban areas, knowing that private companies may only focus on cities for profit.

In the rural sectors, insurers had to get a certain percentage of business (every year two to seven per cent) both in life and general insurance. In the social sector, however, IRDAI has replaced �percentage of business� with �number of life insured.� As many as 5,000 lives are to be insured in the first financial year, 7,000 lives in the second year and 10,000 lives in the third.

Among all the amendments to the Insurance Act, 1938, the 1999 amendment to the legislation was the most vital when the insurance regulator was appointed for exclusive control of insurance sector with an opening of the sector to private companies for better growth and to bring more and more people within the ambit of insurance services.

These features have to be relevant today, when the insurance sector should come forward to the rescue of the flood-affected people. The loss suffered by the individual/families becomes the responsibility of the insurance companies as the granting rural coverage falls within the ambit of their commitment that was conditional to the granting of their licence to underwrite insurance business in the country by the IRDAI. Noncompliance of the above provision is a punishable offence, asserted Dutta.

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Insurance cos� social responsibility remains untapped, says expert

There is an urgency to harness the unexplored�potential of the insurance sector for extending support to a systematic disaster management programme, through its elaborate social welfare objectives for disaster mitigation and insurance coverage to the life and property of the victims of the disasters, including flood, earthquakes, etc.

This is the opinion expressed by noted insurance expert Kallol Kumar Dutta, the man who suggested a universal health policy for the entire population of the country and which ultimately helped the Union Government device the �Ayushman Bharat� scheme.

Talking to this newspaper, Dutta said that to address the recent flood-induced crisis experienced by the States and the huge loss of lives and infrastructure, �we need to create a systematic planning for outreach and dissemination of the insurance sector and its unique features of socially oriented�programmes.�

It is being felt that the lack of public interest and mobilisation for realisation of these programmes is primarily due to lack of awareness and insurance-educated citizenry in the nation as a whole, Dutta said.

Referring to Assam and the catastrophe caused by the recent flood in the State, he said that these devastations have been overlooked by the IRDAI (Insurance Regulatory and Development Authority of India). The regulatory body has been indifferent, keeping a facade of non-involvement and non-interference at this time of national calamity, he stated. It has refused accountability for its failure to question the responsibility of all the licensed insurance companies � both�the private and the public sectors � to fulfil their liabilities and compensate forthwith, as per their commitments that were registered when they were allowed to underwrite insurance business in India.

When the insurance sector was opened up to the private sector in year 2000, as per the amendment to Insurance Act, 1999, it categorically defined the focus of social welfare responsibility of private insurance companies to cover both rural and urban areas, knowing that private companies may only focus on cities for profit.

In the rural sectors, insurers had to get a certain percentage of business (every year two to seven per cent) both in life and general insurance. In the social sector, however, IRDAI has replaced �percentage of business� with �number of life insured.� As many as 5,000 lives are to be insured in the first financial year, 7,000 lives in the second year and 10,000 lives in the third.

Among all the amendments to the Insurance Act, 1938, the 1999 amendment to the legislation was the most vital when the insurance regulator was appointed for exclusive control of insurance sector with an opening of the sector to private companies for better growth and to bring more and more people within the ambit of insurance services.

These features have to be relevant today, when the insurance sector should come forward to the rescue of the flood-affected people. The loss suffered by the individual/families becomes the responsibility of the insurance companies as the granting rural coverage falls within the ambit of their commitment that was conditional to the granting of their licence to underwrite insurance business in the country by the IRDAI. Noncompliance of the above provision is a punishable offence, asserted Dutta.

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