New Delhi, Nov 1 (UNI) Finance Minister P Chidambaram today said the Planning Commission and the Ministry of Agriculture are examining introducing a new agricultural insurance scheme, which will attempt to improve the existing scheme.
The Minister made this observation while addressing the Parliamentary Consultative Committee attached to his Ministry.
Mr Chidambaram alluded to the fact that there was huge untapped potential in the insurance sector and spoke about the impressive performance of the Life Insurance Corporation.
The Finance Minister said with the increase in per capita income, insurance was now being perceived not only as an instrument for risk coverage, but also for affecting savings and investments.
He said insurance penetration, which is a reflection of the gross premium as a percentage of the GDP, has gone up from 2.3 in the year 2000 to 4.8 in 2006.
Similarly, insurance density which measures the gross premium per capita in dollars has gone up from 9.90 in the year 2000 to 38.40 in the year 2006.
Mr Chidambaram said these figures, though, are comparatively lower than the figures of some of the countries in the developed world; it was expected that in the years to come there will be further improvement in insurance penetration and density.
He stated that people now are becoming more careful of their health status and are opting for health insurance schemes.
The Finance Minister stated that the National Agriculture Insurance Scheme (NAIS), which was introduced in 1999-2000 season, was continuing. It covers all farmers who take loans from commercial banks, cooperative banks as well as rural banks. It operates on the basis of area approach.
He said that as agriculture loans increase, more and more farmers would be covered under this scheme.
In addition to NAIS, in pursuance of the budget announcement, a weather based crop insurance scheme has been launched on a pilot basis.
Regarding employment generation by the insurance sector, Mr Chidambaram said that in the last seven years the number of insurance agents has gone upto 20 lakhs, corporate agents to 5000 and brokers to 258.
Speaking about the role of LIC, the Finance Minister said it was doing a "remarkable job" and the Government was encouraging the Corporation to go global.
On an issue of early settlement of claims, Mr Chidambaram said 99.93 per cent claims are properly settled by the LIC in the life insurance sector.
The meeting was attended by Mr K C Singh Baba, Prahlad Joshi, Angadi Suresh Chanabasappa, Pusp Jain, M Ramdas, P C Thomas, N H Suryawanshi, DK Adikesavulu, Tarit Baran Topdar and Mohan Rawale from the Lok Sabha and Mr Bimal Jalan and Mr G.K. Sanghi from Rajya Sabha.
Ministers of State for Finance Mr S S Palanimanickam and Mr Pawan Kumar Bansal, apart from senior officers of the Finance Ministry, attended the meeting.