Life insurance companies sold 25.7% of new policies in 2012-13 in the rural sector. According to Insurance regulatory and Development Authority (Irda)’s annual report for 2012-13, all the 23 private sector life insurance companies had fulfilled their rural sector obligations.
The life insurers had underwritten 11.3 million policies in the rural sector, out of 44.1 million new policies underwritten by them in 2012-13. LIC had underwritten 25.44% of the new policies and private insurers had underwritten 26.99% of their new policies in the rural sector.
The Regulations framed by the Authority on the obligations of the insurers towards rural and social sector stipulate targets to be fulfilled by insurers on an annual basis.
In terms of these regulations, insurers are required to cover year wise prescribed targets, in terms of number of lives under social obligations; and year wise prescribed targets in terms of percentage of policies to be underwritten and percentage of total gross premium income written direct by the life and non-life insurers respectively under rural obligations.
The regulations require insurers to underwrite business in these segments based on the year of commencement of their operations and the applicable targets are linked to the year of operations of each insurer.
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