Press Information Bureau

Government of India

Ministry of Finance

23-August-2012 17:02 IST

The Insurance Regulatory and Development Authority (IRDA) has reported that it has mandated regulations for both life and non-life insurers and fixed targets for insurers business in “Rural Areas”. There is no such mandated regulation for Semi-Urban Areas. The authority takes regulatory action for non-compliance of the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural or Social Sectors) Regulations, 2002 and amended from time to time, by the State-owned insurers in the rural sector. As per the regulations, the target for exclusive business in rural area fixed for State-owned life and non-life insurers is 25% of the total number of policies and 7% of gross premium income written direct in that year, respectively.

The performance of the State-owned life insurer in the rural area was 32.74% against target of 25% of the total number of policies whereas for non-life insurers, it was 10.15 % against target of 7% of gross direct premium income for the financial year 2010-11.

This was stated by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in the Rajya Sabha today.

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DSM/RS/bs

Rural area insurance targets: state insurers exceeded IRDA-mandated rural business thresholds, confirming regulatory monitoring. IRDA prescribes regulatory obligations requiring State-owned insurers to meet specified rural area business targets under the Obligations of Insurers to Rural or Social Sectors Regulations, 2002, and enforces compliance. The rules mandate a prescribed share of total policies for State life insurers and a prescribed share of gross direct premium for State non-life insurers in rural areas; no mandated targets apply to semi-urban areas. For 2010-11 State-owned insurers reported performance exceeding those rural targets and the Ministry of Finance disclosed these figures in a parliamentary reply.