Finance Minister P. Chidambaram has called for improved penetration of non-life insurance sector in the country. Addressing a meeting of CMDs, CEOs and MDs of public and private sector insurance companies in New Delhi yesterday, Mr. Chidambaram said the major challenges before the non life insurance sector is how to increase its reach to the maximum number of people along with growth of investment in the sector. An official release said the CEOs expressed various difficulties being faced by the sector especially in the field of motor car insurance including third party insurance, health, home, fire and group insurance among others. It was suggested to put in place a mechanism for appropriate pricing for group health insurance.

The participating CEOs of public and private sector companies expressed various difficulties being faced by this sector especially in the field of motor car insurance including third party insurance, health insurance, home, fire and group insurance among others. It was informed that motor vehicle insurance, which has 41% share in the non-life insurance sector, faces major challenges because of regulated tariff, unlimited liability, non-jurisdiction restriction for filing the claim and underinsurance among others. The participating CEOs of the insurance companies suggested de-tariffing of motor TP premium and cap on liabilities etc among others.
As regards health insurance, it was suggested that a proper mechanism be put in place whereby an appropriate pricing mechanism for group health insurance is adopted which takes into consideration the existing ICR (Incurred Claims Ratio), management expenses, medical inflation, cost of under-writing the business and other associated problems. Some of the participating CEOs raised tax related issues including non-applicability of MAT for non-life insurance sector at par with life insurance companies and zero rated service sector on crop insurance, tools, senior citizen policy, RSBY and other exempt categories.
Suggestions were also made to further improve the penetration in home insurance sector and to resolve agents and regulator related matters