In your interest.
Online Personal Finance Magazine
No beating about the bush.
The outstanding number of death claims, as on 31 March 2009, as a percentage of total number of claims intimated to the companies in 2008-09, stood at 7.75% for private firms while the same for LIC was 2.21%.
Private sector insurance firms have more than three times the outstanding number of death claims on individual insurance policies compared to state-owned Life Insurance Corporation of India (LIC), finance minister Pranab Mukherjee told the Rajya Sabha on Tuesday.
Replying to supplementaries during Question Hour, he said that the outstanding number of death claims, as on 31 March 2009, as a percentage of total number of claims intimated to the companies in 2008-09, stood at 7.75% for private firms.
The same for state-run LIC was 2.21%, he said. For group policies, private sector companies had 3.93% outstanding claims while LIC had 0.24%.
Mr Mukherjee said that private sector insurance companies started operations eight years back while LIC has been in business since 1956.
Detailed investigation is carried out in case of early insurance claims, he said, adding that claims made to private firms fall under this category since they have been in operations for 8-10 years only.
"There certainly is a difference (between outstanding claims with private and public sector firms). This difference will have to be looked into but forming a committee for this is not a solution," he said.
The government's role, he said, was limited to providing a level playing field for both private and public sector firms. Minister of state for finance Namo Narain Meena said that there were 23 insurance companies operating in India, of which 22 were private sector firms.
He said claim pendency ratio of private firms was higher than LIC but it has come down due to intervention of sector regulator Insurance Regulatory and Development Authority (IRDA).
The pendency ratio of private firms was 13.32% in 2006 which came down to 10.88% in 2007 and to 7.75% in 2008-09, he said, hoping that this would be reduced further in coming years.