General insurance industry needs a fresh lease of life

Jul 01 2014, 11:32 IST
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SummaryWith the election handing a decisive mandate to the new government, now is the time for concrete steps to revive the economy.

par with others on taxation of long-term investments.

Unveil policies for long-term growth. The insurance Bill needs to be passed to enable long-term capital inflows. Outdated Acts, such as Motor Vehicle Act pertaining to motor third-party claims, need revision. It is time that maximum liability on third-party claims is fixed as is the practice in developed countries like US, UK and Germany. The period permissible to make a claim too needs to be fixed at within three years from date of accident for timely intimation and claims payment.

Another key measure would involve forming a natural catastrophe pool. With the industry looking at increasing exposure to catastrophes, this will enable insurance firms to take on this critical risk component. Budget 2014 should act as an enabler for the general insurance industry to efficiently perform its role of risk mitigation. With a thriving general insurance sector, the nation can focus on growth-oriented initiatives without getting stymied by risk-related constraints.

Bhargav Dasgupta

The writer is MD & CEO, ICICI Lombard General Insurance Company

Time for change

Impose health cess on firms that don’t provide cover to employees

Increase I-T exemption for health insurance to R50,000

Make home insurance mandatory at time of registration

Abolish or revise outdated Acts, such as Motor Vehicle Act

Form a natural catastrophe pool to deal with calamities

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