Govt set to create general insurance behemoth

Three public sector general insurance companies - National Insurance Company Ltd, United India Assurance Company Limited and Oriental India Insurance Company Limited, will be merged into a single insurance entity, and will be subsequently listed.

Making this announcement in his Budget speech, Finance Minister Arun Jaitley also mentioned that the government has approved listing of 14 Central Public Sector Enterprises (CPSEs), including two insurance companies, on the stock exchanges.

Also, he announced raising the limit of deduction for health insurance premium and/ or medical expenditure from Rs 30,000 to Rs 50,000, under section 80D. All senior citizens will now be able to claim benefit of deduction up to Rs 50,000 per annum in respect of any health insurance premium and/or any general medical expenditure incurred.

Welcoming this move, Karni S Arha, Chief Financial Officer of Aviva India said, "Overall health insurance deductions increasing to Rs 50,000 for senior citizens is a big positive move to promote healthcare and safety amongst the most deserving".

National Health Protection Scheme, which will cover over 10 crore poor and vulnerable families, is a great initiative and will act as a catalyst in elevating the insurance sector and in turn the health care services for the uninsured and under-insured population, Arsha added.

Till now, Pradhan Mantri Jeevan Jyoti Beema Yojana (PMJJBY), a government-backed life insurance scheme, has benefitted 5.22 crore families with a life insurance cover of Rs 2 lakh on payment of a premium of Rs 330 per annum. Under Pradhan Mantri Suraksha Bima Yojana, 13.25 crore people have been insured with personal accident cover of Rs 2 lakh on payment of a premium of Rs 12 per annum.

Finance Minister also announced that the government will expand the coverage under Prime Minister Jan Dhan Yojana by bringing all sixty crore basic accounts within its fold and undertake measures to provide services of micro insurance and unorganised sector pension schemes through these accounts.

"This initiative will help increase penetration of insurance," said Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.