What are the benefits of having an insurance company in India?
The Insurance Regulatory and Development Authority (IRDA) has asked all states to start setting up their own insurance companies, following the Narendra Modi government’s decision to introduce a National Insurance Scheme (NIS).
The regulator is also examining the possibility of an insurance scheme similar to that of the US.
“It is a very important move, as we need to have a national insurance scheme in India, which will be able to help all citizens, irrespective of their age,” IRDA Secretary General Sanjay Sharma told ET.
The central government is yet to make any decisions about setting up an insurance system, but has also been talking to the states on how to structure their plans.
“This will be a model for other countries.
If the States are ready to go this route, we will take up the issue with the government of the day,” Sharma said.
The regulator said the regulator will work with stakeholders, including state governments, to ensure a smooth rollout of the scheme, which has so far been approved by the government.
It will be ready for implementation in the next two months, according to the regulator.
It said that the insurance companies would be able use the scheme to provide cover for the elderly, the disabled, children under the age of six and women and under the protection of the family law.
“There are two basic types of insurance.
There are individual and corporate,” Sharma told reporters.
“The individual insurance scheme is a private policy for the insureds.
Corporate insurance is a policy for corporations that is issued by the central government.
There will be separate insurance for different types of companies,” he said.
“We have to go through all these issues with the insurance industry, to make sure that there is an effective scheme,” Sharma added.
The government has also decided to introduce two separate insurance schemes for the poor and under-employed people.
According to Sharma, the government has been working on setting up the two schemes since July.
The former is for people with low incomes and the latter is for the under-educated.
The first scheme will provide financial assistance to those in the “under-employed category” who are unable to pay rent.
“In the first phase, there will be the income support for people in this category,” Sharma explained.
The scheme will also be designed for people who do not have bank accounts, such as those who are employed, have been living in Delhi for less than one year, have not worked in the past five years and do not hold a passport.
“These people will be enrolled in this scheme, and we will get their details through the Aadhaar card.
We are planning to make this a nationwide scheme,” he added.