The Hindu : Business : Kalam wants LIC to go in for paperless policy documents

Online edition of India's National Newspaper
Friday, Sep 29, 2006
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Kalam wants LIC to go in for paperless policy documents

Special Correspondent

A micro insurance product Jeevan Madhur launched

Minimum sum of micro insurance is Rs. 5,000 To cover 18-60 year age group

SUCCOUR TO THE NEEDY: President A P J Abdul Kalam with Finance Minister P Chidambaram (left), and Chairman of Life Insurance Corporation of India, T S Vijayan (centre), launching a new policy "Jeevan Madhur" during the Golden Jubilee celebrations of the LIC in New Delhi, on Thursday. — Photo: V.Sudershan

NEW DELHI: The President, A. P. J. Abdul Kalam, on Thursday handed down a recipe to the Life Insurance Corporation (LIC) for increasing its market share in the wake of private players making inroads into the insurance sector.

In his address, after launching `Jeevan Madhur,' a micro-insurance product of LIC at its golden jubilee celebrations here, Dr. Kalam said: "LIC may consider increasing the total policyholders of the corporation from the existing 190 million to 380 million within the next five years by large-scale penetration into the rural and unorganised sector.''

For servicing double the number of existing customers, the President suggested dematerialisation of policy documents — a paperless scheme as prevailing in stock markets — as that would enable easy storage of policies by policyholders.

"There may be a need for change of certain provisions in the Insurance Act, both at the Centre and the States. I am sure the Government may consider implementation of such changes for introducing dematerialised policies,'' Dr. Kalam said, while noting that LIC should also consider the provision of demat policies in electronic form for the convenience of policyholders.

Responding to the suggestion, the LIC Chairman, T. S. Vijayan, said he would examine the legal issues involved as insurance policies were legal documents.

Suggesting the setting up of an Institute of Insurance Management on the lines of the Indian Institute of Management (IIM), Dr. Kalam asked LIC to take the initiative as it was the country's largest insurer and there was no such institute for imparting education on the insurance system.

While providing quality manpower to the insurance industry, this institute, he said, could also concentrate on research projects for promoting quality insurance products and systems in the country.

Alongside, for making wider inroads into the insurance business, the President advised LIC to open more branches abroad so as to expand its services to more than two crore PIOs (People of Indian Origin). "This will enable mobilisation of more business from persons of Indian origin to an extent of over ten million and also foreign nationals,'' he said.

Terming LIC as the "best-known Indian brand'' and the "world's largest company'' Finance Minister P. Chidambaram, while speaking at the function, launched two new initiatives specially designed for the poor and the medically unfit.

The two initiatives are a Rs. 50-lakh fund for cochlear transplant and an LIC-floated trust, LIC Golden Jubilee Foundation, for promoting education, medical facilities and the like among the poor sections.

The Jeevan Madhur policy is to cover individuals from the economically underprivileged segments of the society in the 18 to 60-year age group. The minimum sum assured under the plan is Rs. 5,000, while the maximum is Rs 30,000.

The premium can be paid weekly, fortnightly, monthly, quarterly, half-yearly and annually. The term of the policy ranges between five and 15 years.

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