This is with reference to the editorial “Patchy cover” (Business Line, September 25) on the issue of LIC and other state-owned non-life insurers going in fort public offers. Insurance business, unlike other businesses, carries an element of public trust.
The claims of the policyholders should be honoured to the maximum. Almost all the claims are met by LIC, which is the major life insurance provider.
This is because of its public sector character that ensures strict regulation and accountability. LIC has invested crores of its money in the infrastructure development of the country.
The global financial crisis had only a limited impact on the insurance sector in India due to the predominance of public sector institutions such as the LIC and the GIC.
Going in for a public issue or an offer for sale by the Government may disturb the public sector character of these institutions. Ganapathy Krishnan
Thiruvananthapuram.

The above letter by Com. N.GanapathyKrishnan was published in the Business Line on 26.9.2012



RESPONSE By Com.Suresh Kumar G,  Punalur Branch Unit.


The editorial "PATCHY COVER" actually provides a cover to the hidden agenda of corporates who sought to make huge profits from Life Insurance Business. When the Insurance industry was opened up in 2000 it was declared that the new companies would bring in new technologies, new products and would help in increasing insurance penetration. But they concentrated on ULIP policies that were already available, just to garner huge amounts in a short time. 'Penetration' was also not achieved as the private companies preferred payment of penalty to opening rural branches. They did not contribute even a penny to nation building.   Your editorial conveniently glosses over these ground realities. 

          Since inception in 1956, through a legislation in parliament, LIC had been the trustworthy custodian of people's money which was used to improve the living conditions of our people. This was achieved through the dedicated team work of employees and agents. The private companies never wanted to build up an agent base, as they wanted to cut operational costs to maximise profits. 

          It is very amusing to note your concern for the uninsured brethern of ours, when you are not concerned that most of such people live with a meagre daily income below Rs.20.  It is also conveniently forgotton that almost 20 years of globalisation has made life miserable for the poor and enjoyable for the rich.   

          Telecom, Banking and Insurance are three entirely different sectors which need different methods of marketing, administrative and accounting procedures.  Of the three, Insurance is a long term business.  Any Life Insurance company, if it wants to succeed, has to gain the trust of the people and has to sustain it continuously.  That the private companies failed in this aspect is also conveniently ignored.
           
         The Finance Standing Committee of Parliament has rejected the Government's suggestions regarding FDI hike in Insurance Sector.  The Committee has also warned against any attempt to dilute Govt's stake in LIC.  In a democracy people's will has to prevail and not that of the profit hungry corporates.  Hence your clamour for LIC's stake sale by Government is deplorable.  It further smacks of an unholy nexus between media houses and corporates to plunder the hard earned money of the common people.