Insurers will propose changes in health insurance and de-tariffing of third party motor insurance in the next meeting.
The FM asked general insurers to list the issues which are acting as hurdles in the growth of the industry in his meeting with them on Monday. The insurers are reported to have suggested tax breaks upto Rs. 1 lac on retail general insurance products (health, motor and property) along the lines of life insurance premium.
He has asked the insurers to take measures to increase the penetration of general insurance. The FM has expressed his concern about the low penetration level (0.7 percent) and reportedly said that the percentage should improve to an average standard of 1.5 percent to 4 percent. According to industry officials, the FM will be first looking at various steps needed to be taken to increase penetration.
P Chidambaram is supposed to meet the officials again next week to discuss the measurers needed to be taken for the improvement of the industry. Among the issues that the public and private insurers are planning to discuss with the FM are lowering of minimum alternate tax for general insurers, proper pricing mechanism for group health insurance policies based on existing claims ratio, management expenses, medical inflation, cost of under-writing the business and de-tariffing of motor insurance.