To increase awareness and deepen insurance penetration, Government should launch a 'Jan Bima Yojna' on the lines of a similar programme launched for banking, Insurance Regulatory and Development Authority (IRDA) Chairman T S Vijayan said on Monday.
"The Prime Minister should launch 'Jan Bima Yojna' in line with the 'Jan Dhan Yojna' to increase the level of awareness among people on the importance of insurance. There is a need for concentrated efforts to make people aware about insurance," Vijayan told reporters here at the 16th FICCI Annual Insurance Conference.
The Narendra Modi-led government launched the 'Jan Dhan Yojana' in August this year with an aim to deepen the banking penetration, and the banks have so far responded by opening over 6 crore basic accounts of the targeted 7.5 crore.
It may be recalled that just like banking, the country is also under-covered from an insurance point of view.
The Jan Dhan Yojana also has an insurance component wherein the account holders are being given personal accident cover.
On foreign holding caps in the insurance sector, Vijayan said allowing 26% FDI in the life and non-life companies has upped the industry's growth to 3.9% from the earlier 1.7%.
However, he said that this growth rate of 3.9% is not enough and there is a vast potential in the country as annually for the next 20 years about 2.5 crore people will be entering the job market.
On the non-life front, the potential is huge as the vehicle ownership is growing by over a million every year, he pointed out.
"The 26% FDI has been a success story. So many companies have come, collaboration has come and technology has come. For any investment we should look at if our legal and regulatory system can control it. We are quite capable of doing that. We should ensure that the deployment of money is as per regulations only, and any policy holder liquidity should be invested in India only," he added.
Replying to demands from the industry to increase the FDI cap to 49%, Vijayan said, "will 49% FDI double the insurance penetration from 3.9% to 7.2% the industry has to reply.
"The insurance sector provides a huge potential for growth but we have to see if the policy holders or the country as a whole will be benefited with the FDI hike." The regulator also asked the insurance companies to protect the agents by fixing minimum wages for them and create employment opportunities in the industry.
"There should be some minimum protection for the insurance individual agents also. Companies should come forward to remunerate agents in terms of minimum wages of Rs 10,000 per month," he advised.
As of now there are 20 lakh agents in the insurance agents, both life and non-life, in the country.
