Media Release

Udupi, Apr 7: Members of All India Insurance Employees’ Association (AIIEA) met Candidate from Indian National Congress and Janatha Dal (S) Pramod Madhwaraj and submitted a memorandum containing suggestions to be implemented for the development of country.

The members requested the points mentioned in the memorandum to be incorporated in the 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.

3. No to privatisation 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.

4. 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.