insurance

For a country which doesn’t like to hear the term ‘Socialism’, the US government backed bailout of insurance company AIG is exactly that: pure unbranded socialism. Politically the government might have given it a spin saying that this was a bailout of AIG’s consumers and insurance policy holders and not the shareholders. The fact however remains that this bailout was necessary to prevent a bigger stock market crash across the world. Had AIG not been saved by the US Federal Reserve, the ripples would have been massive for the Indian markets because apart from the obvious global impact, AIG is also an important stock holder in many Indian equities.

Within an hour of the Government Trust Vote held in the month of July this year, business reporters stormed the Finance Minister and bombarded him with umpteen questions. Before rushing off to his waiting car the Finance Minister highlighted the need to approve three important finance laws. One of them which has been on the backburner since the first year of the present government is the Insurance Laws Bill. Insurance sector wise, the immediate priority for the Finance department is to table the amendments to this bill which will raise FDI (Foreign Direct Investment) in the Indian Insurance sector to 49%.

By: BHARAT RATNA

• ASSOCHAM brought out a paper on `Rural India and Its New Investors’ and emphasized the importance of rural investments in insurance sector

• Insurance companies can add Rs.1000 Crores Assets to their Networth from Rural Folks

• 200 million rural population out of 700 million have the surplus money to save money in their available options of post offices and extension counters of commercial banks.

• Insurance companies should concentrate on these rural areas by offering innovative schemes with affordable premiums

By Vipin Agnihotri