Rural and Social Sectors of insurance

7/27/2019 Rural and Social Sectors of insurance

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CHAPTER - 11

RURAL AND SOCIAL SECTORS

PRESENTED BYNEHA A. DIVEKAR, A.A.OP&GS DEPARTMENT, C.O.


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RURAL AND SOCIAL SECTORS

LEGAL PROVISIONS SECTIONS 32B AND 32C HAVE

BEEN ADDED TO THEINSURANCE ACT, 1938, VIDEPARA 19 OF THE FIRSTSCHEDULE OF THE INSURANCE

REGULATORY ANDDEVELOPMENT AUTHORITY ACT,1999


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RURAL AND SOCIAL SECTORS LEGAL PROVISIONS

32B INSURANCE BUSINESS INRURAL OR SOCIAL SECTOR

MANDATORY FOR ALL THE INSURERSTO UNDERTAKE LIFE INSURANCE OR

GENERAL INSURANCE BUSINESS IN THERURAL OR URBAN SECTOR


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LEGAL PROVISIONS 32C. OBLIGATIONS OF INSURER EVERY INSURER HAS TO PROVIDE LIFE

INSURANCE POLICIES TO THE PERSONS

RESIDING IN THE RURAL SECTOR,

WORKERS IN THE UNORGANIZED ORINFORMAL SECTOR OR FOR

ECONOMICALLY VULNERABLE OR

BACKWARD CLASSES OF THE SOCIETY

AND OTHER CATEGORIES OF PERSONSAND SUCH INSURANCE POLICIES SHALL

INCLUDE INSURANCE FOR CROPS.


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NOTIFICATION OF

REGULATIONSTHE REGULATIONS WERE AMENDED IN

OCTOBER 1992 AND NOTIFIED IN THE

OFFICIAL GAZETTE DATED 16.10.2002.

A FEW DEFINITIONS ARE GIVEN

AS FOLLOWS :


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DEFINITIONS THE RURAL SECTOR - A PLACE IN

WHICH, AS PER THE LATEST CENSUS,

- THE POPULATION IS LESS THAN 5,000,

- THE DENSITY OF POPULATION IS LESSTHAN 400 PER SQUARE KILOMETER AND

- MORE THAN 25% OF THE MALE WORKING

POPULATION ARE ENGAGED INAGRICULTURAL PURSUITS.


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DEFINITIONS

AGRICULTURAL PURSUITS are definedas cultivation, agricultural labour, work in

livestock, forestry, fishing, hunting,

plantation, orchards, and allied activities.

THE SOCIAL SECTOR is defined asincluding the unorganized sector, the

informal sector, the economically vulnerable

or backward classes and other categoriesof persons, both in rural and urban areas.


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DEFINITIONS UNORGANIZED SECTOR

is defined as including self-employed

workers such as agricultural labour, beedi

workers, brick kiln workers, carpenters,

cobblers, construction workers, fishermen,

hamals, handicraft artisans, handloom and

khadi workers, lady tailors, leather and

tannery workers, papad makers,powerloom workers, physically

handicapped self-employed persons, etc.


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DEFINITIONS

THE INFORMAL SECTORis defined as the small scale, self-employedworkers typically at a low level of organizationand technology, with the primary objective of

generating employment and income withheterogeneous activities like retail trade,transport, repair and maintenance, construction,personal and domestic services, and

manufacturing with the work being mostly labourintensive, having often unwritten and informalemployer-employee relationships.


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REGULATIONS REGARDING

BUSINESS IN RURAL SECTORInsurers who begin to transact life insurancebusiness in the year 2000 or later, arerequired by these regulations to write, in the

rural sector,At least 7 % the total policies written direct, inthe first financial year, going up to

9% in the second financial year,

12% in the third financial year,

14% in the fourth financial year and

16% in the fifth financial year.


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BUSINESS IN SOCIAL SECTORWith regard to the social sector, for

private insurers the obligations are laid

down as :5000 lives in the first financial year,

7500 lives in the second financial year,

10000 lives in the third financial year,15000 lives in the fourth financial year,

20000 lives in the fifth financial year.


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BUSINESS IN SOCIAL SECTOR With regard to existing insurers, the

regulations provide that obligations

would be decided by the IRDA afterconsultation, but the quantum would

not be less than what had been

recorded for the year ended31.3.2002.


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POTENTIAL IN RURAL

SECTOR

There is a vast potential of more than 5 lakhvillages in India with a total population of nearly 75crores.

Nearly 25% of them are below the poverty line

compared to only about 7% in the urban areas. Nearly 1.5 crores households in the rural areasconsidered to have an annual income ofRs.50,000 or above.

More than 3,500 branches of commercial banksoperate in the rural areas, apart from the banksexclusively concerned with agriculturaldevelopment.


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LICs BUSINESS IN RURAL SECTOR

The LIC's business from the rural areas had beenincreasing steadily.

In 1997-1998, the business was more than 52% innumber of policies and more than 42% in sumassured. This is apart from the business coveredunder group schemes in the social sector.

The awareness about life insurance is not as lowas it used to be some thirty years ago.

The LIC had been doing intensive publicity

through the mobile vans and other traditional aswell as non-traditional media. The radio andtelevision broadcasts reach almost every villagethrough community sets.


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NEED FOR INSURANCE IN

SOCIAL SECTOR The benefits of life insurance are needed mostby people in this sector, as they are relatively

poor and have very little savings, if at all.

Soon after nationalization of life insurance,this need was recognized and efforts were

made to introduce what was called 'mass'

insurances. The concept was to cover very large

numbers of poor people in one scheme.


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VARIOUS SCHEMES

LANDLESS AGRICULTURAL LABOURERSGROUP INSURANCE(LALGI).

INTEGRATED RURAL DEVELOPMENTPROGRAM(IRDP).

SOCIAL SECURITY GROUP SCHEMES(SSGS).

RURAL GROUP LIFE INSURANCE SCHEMES(RGLIS).

JANASHREE BIMA YOJANA(JBY). KRISHI SHRAMIK SAMAJIK SURAKSHA

YOJANA(KSSSY).

SHIKSHA SAHAYOG YOJANA(SSY).


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Landless Agricultural Labourers Group

Insurance Scheme - LALGI

LICS CONTRIBUTION IN THIS AREA STARTED WITHLALGI ( Landless Agricultural Labourers GroupInsurance Scheme) FIRST MAJOR SOCIAL SECURITY SCHEMESTARTED FROM 1ST APRIL, 1987. GUJARAT IS THE PIONEER STATE AGE LIMIT 18 yrs. TO 60 yrs. SUM ASSURED Rs.1000/- PREMIUM WAS BORNE BY GUJARAT GOVT.


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LALGI Contd... GOVT. OF INDIA EXTENDED THE SCHEMETHROUGHOUT THE COUNTRY ON 15TH AUGUST,1987.

WORLDS LARGEST GROUP SCHEME COVERING1.2 Cr. LABOURERS. SUM ASSURED Rs. 2000/- PREMIUM WAS PAID OUT OF SOCIAL SECURITYFUND ( THIS SCHEME WAS WITHDRAWN FROM14TH AUGUST 2000).

(IRDP) INTEGRATED RURAL


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(IRDP) - INTEGRATED RURAL

DEVELOPMENT PROGRAMME

INTRODUCED IN 1988-89. COVER Rs.6000/- TO BENEFICIARIES OF

IRDP.

DOUBLE ACCIDENT BENEFIT

NOW REPLACED BY SWARNAJAYANTI GRAM

SWAROZGAR YOJANA.

NO PREMIUM.

CLAIMS SETTLED FROM SEPARATE FUNDCREATED FOR THE PURPOSE.

S G S


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Swarnajayanti Gram Swarojgar

Yojana - SGSY

THE SCHEME IS ADMINISTEREDTHROUGH DISTRICT RURALDEVELOPMENT AGENCY COMING UNDERZILLA PARISHAD.

ALL THE PERSONS BETWEEN 18 AND 60YEARS AND RECEIVING SUBSIDY /FINANCIAL ASSISTANCE / LOAN UNDER

THIS SCHEME ARE COVERED UNDERTHIS SCHEME FOR A PERIOD OF 5 YEARS

FROM THE DATE OF DISBURSEMENT OF

LOAN.

(SSGIS) SOCIAL SECURITY


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(SSGIS) SOCIAL SECURITY

GROUP INSURANCE SCHEME

Cover up to Rs.5000/- Premium Rs.10/- per 1000 S.A. per member :

- 50% by member/ Nodal Agency.

- balance 50 % from SSF.

Accident benefit

- death/total disability Rs.25,000/-

- partial disability Rs.12,500/-

24 approved groups. No new schemes w.e.f. 10.8.2000 - old

schemes only can be renewed.


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24 APPROVED OCCUPATIONS1 Beedi Workers 2 Brick Kiln Work3 Carpenters 4 Cobblers

5 Fishermen 6 Hamals

7 Handicraft Artisans 8 Handloom Weavers9 Handloom & Khadi Weavers

10 Lady Tailors

11 Leather & Tannery Workers

12 Papad Workers attached to SEWA

13 Physically Handicapped Self Employed Persons


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24 APPROVED OCCUPATIONS14 Primary Milk Producers15 Rickshaw Pullers / Auto Drivers

16 Safai Karmacharis

17 Salt Growers

18 Tendu Leaf Collectors19 Scheme for the Urban Poor

20 Forest Workers

21 Sericulture

22 Toddy Tappers23 Powerloom Workers

24 Hilly Area Women


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SOCIAL SECURITY FUND

SOCIAL SECURITY FUND CREATED IN 1988-89.

USED TO SUBSIDISE PREMIUM.

50% FOR SOCIAL SECURITY GROUP SCHEMES.

100% PREMIUM TO COVER ACCIDENTAL

BENEFITS (SSGS).

50% FOR JANASHREE BIMA YOJANA.

KRISHI SHRAMIK SAMAJIK SURAKSHA YOJANA. 100% FOR SHIKSHA SAHAYOG YOJANA -

SCHOLARSHIP.


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Rural Group Life Insurance Scheme

(RGLIS)

THERE WAS ALSO THE RURAL GROUP

LIFE INSURANCE SCHEME (RGLIS),

LAUNCHED ON 15-8-1995

FOR RURAL POPULATION BELOW

POVERTY LINE.

AGE LIMIT 20 TO 50 yrs

BENEFITS : RS. 5000/- PAYABLE ON

DEATH BEFORE THE AGE OF 60.


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Rural Group Life Insurance

Scheme (RGLIS)

PREMIUM FOR AGE 20 TO 40 yrsRs. 60/-

PREMIUM FOR AGE 40 TO 50 yrsRs. 70/-

GENERAL AS WELL AS SUBSIDISED

THE SCHEME WAS ADMINISTERED THROUGHELECTED PANCHAYATS.

50 % SUBSIDY FROM STATE AND CENTRALGOVT. IN EQUAL PROPORTION (IN RESPECT

OF SUBSIDISED SCHEME) THIS SCHEME WAS WITHDRAWN W.E.F

01.04.2000


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JANASHREE BIMA YOJANA

LAUNCHED ON

10TH

AUGUST, 2000.


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ELIGIBILITY Rural as well as urban population.

Persons below poverty line and alsomarginally above the poverty line.

Between age 18 and 59 yrs.

Minimum group size 25.

42 occupations are identified so far.


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42 OCCUPATIONAL GROUPS

1 Beedi Workers 2 Brick Kiln Work

3 Carpenters 4 Cobblers

5 Fishermen 6 Hamals

7 Handicraft Artisans 8 Handloom Weavers9 Handloom & Khadi Weavers

10 Lady Tailors

11 Leather & Tannery Workers

12 Papad Workers attached to SEWA

13 Physically Handicapped Self EmployedPersons


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42 OCCUPATIONAL

GROUPS

14 Primary Milk Producers

15 Rickshaw Pullers / Auto Drivers

16 Safai Karmacharis

17 Salt Growers18 Tendu Leaf Collectors

19 Scheme for the Urban Poor

20 Forest Workers

21 Sericulture22 Toddy Tappers

23 Powerloom Workers

24 Hilly Area Women


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42 OCCUPATIONAL GROUPS

25 Food Stuffs like Khandsari / Sugar26 Textile

27 Manufacture of Wood Products

28 Manufacture of Paper Products29 Manufacture of Leather Products

30 Printing

31 Rubber & Coal Products

32 Chemical Products like candle manufacture

33 Mineral products like earthern toysmanufacture


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42 OCCUPATIONAL

GROUPS34 Agriculturists

35 Transport Drivers Association

36 Transport Karmacharis37 Rural Poor

38 Construction Workers

39 Fire Crackers Workers

40 Coconut Processors

41 Aanganwadi Teachers

42 Kotwal


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BENEFITS NATURAL DEATH:

- Rs.20000/- to the nominee

ACCIDENT BENEFITS:

- On Death: Rs.50000/- to the nominee

- Total Permanent Disability: Rs.50000/- to the

beneficiary.

- Partial Permanent Disability : Rs.25000/- to

the beneficiary.


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PREMIUM Rs. 200/- PER ANNUM OUT OF WHICH

- Rs. 100/- PAYABLE BY MEMBER /NODAL AGENCY.

- Rs. 100 FROM SOCIAL SECURITYFUND OF GOVT. OF INDIA.


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ADMINISTRATION OF SCHEME THE NODAL AGENCY ACTS FOR & ON

BEHALF OF INSURED MEMBERS IN ALL

MATTERS RELATED TO THE SCHEME.

NODAL AGENCY MEANS STATE GOVT. ,

GRAM PANCHAYAT, NGO, SELF HELP

GROUP OR ANY OTHERINSTITUTIONALISED ARRANGEMENT.


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SETTLEMENT OF CLAIM

LIC SETTLES THE CLAIM BYSENDING THE A/C PAYEE CHEQUE

FAVOURING THE BANKER OF THE

BENEFICIARY / NOMINEE.


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SHIKSHA SAHAYOG

YOJANALAUNCHED ON

31ST DECEMBER,2001


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BENEFITS CONTD.

Survival : lump sum at the end of every10th year till the member attains 60years of age.

Pension (provided the member has paidthe premium at least for a period of 10

years) payable at age 60 on the basisof the amount accumulated to the creditof the member and at least Rs. 100/-per month.


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ADMINISTRATION OF THE

SCHEME The scheme will be administeredthrough Nodal Agencies.

Nodal Agencies will be Gram

Panchayat. Nodal Agencies will identify the

agricultural workers & organize them in

groups of 20 or more. Member wise running account will bemaintained by LIC unit.


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SETTLEMENT OF CLAIM

Claim papers will be submitted to LICthrough the Nodal Agencies.

LIC will settle the claim by sendingAccount Payee cheque directly to thebeneficiary.

Sale of new Schemes discontinued fromDecember, 2003 but old Schemes can berenewed.


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THANK YOU

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Rural and Social Sectors of insurance