Private sector insurance firms have more than three times the outstanding number of death claims on individual insurance policies compared to state-owned LIC, Finance Minister Pranab Mukherjee told the Rajya Sabha today.
Replying to supplementaries during Question Hour, he said the outstanding number of death claims, as on March 31, 2009, as a percentage of total number of claims intimated to the companies in 2008-09 stood at 7.75 per cent for private firms.
The same for public sector Life Insurance Corporation of India (LIC) was 2.21 per cent, he said. For group policies, private sector companies had 3.93 per cent outstanding claims while LIC had 0.24 per cent.
Mukherjee said private sector insurance companies started operations eight years back while LIC has been in business since 1956.
Detailed investigation is carried out in case of early insurance claims, he said adding claims made to private firms fall under this category since they have been in operations for 8-10 years only.
"There certainly is a difference (between outstanding claims with private and public sector firms). This difference will have to be looked into but forming a committee for this is not a solution," he said.
The government's role, he said, was limited to providing level playing field to both private and public sector firms. Minister of State for Finance Namo Narain Meena said there were 23 insurance companies operating in India, of which 22 were private sector firms.
He said claim pendency ratio of private firms was higher than LIC but it has come down due to intervention of sector regulator Insurance Regulatory and Development Authority.
The pendency ratio of private firms was 13.32 per cent in 2006 which came down to 10.88 per cent in 2007 and to 7.75 per cent in 2008-09, he said hoping this would be reduced further in coming years.
