The reported closure of 400 private life insurance branches will impact customer access and the spread of insurance. This is a cause for concern at a time when liberalisation in the insurance industry is awaiting a political decision and a draft Bill is pending. It seems private insurers are following in the banks’ footsteps — banks have been stalling the issue of pass books despite regulatory advice. The reported statement from the insurance regulator that the number of closed branches is a small proportion of the network is questionable.
It is noteworthy that the cost aspect of the state-owned insurer in the first decade of its birth was dealt with by the government. The government appointed a committee (1967) under the chairmanship of a Parliamentarian (the Morarka Committee), with actuaries and regulatory representatives as members to investigate its expenses. What held good for a state-owned insurer 43 years ago should hold good for private insurers today.
Therefore, the government and the regulator should advise private insurers and also appoint an expert independent committee to investigate the pattern of private insurers’ expenses.
S Subramanyan, Mumbai