Bengal Chamber wants EPF, EPS waiver

The Bengal Chamber of Commerce & Industry (BCCI) has made a representation to the Insurance Regulatory Development Authority (IRDA) so that the existing system of mandatory contribution by employees to the Employees Provident Fund (EPF) scheme and the Employees Pension Scheme (EPS) be dispensed with.

BCCI represents over 300 companies in eastern India and made its recommendations at the annual conference on insurance which it organised in Kolkata recently, which the IRDA chairman attended.

BCCI said the scheme mandatorily requires employees to contribute 10 to 12 per cent of their existing wages towards EPF scheme. Instead employees should be given the option to direct their contribution into an individual account system.

It said the government's contribution to the EPS, amounting to 1.16 per cent of wages, should be withdrawn and the pension benefits should be standardised for all establishment, based on employers' contribution of 10 per cent.

"Apart from accumulation, the distribution of pension funds and other retirement benefits should be supervised by the insurers. Further there should be qualified actuaries in charge of evaluation of these funds," according to the recommendations.

BCCI wanted the IRDA to wait till full detariffing within the set deadline, before making it compulsory for placing business through brokers "" as is the common practice in the international insurance market.

Further corporate should be allowed to directly deal, negotiate and place business with the insurers and to enjoy discount without having to go through brokers and agents. "Market forces should be allowed to have full play," the report said.

BCCI felt a new commission structure should be introduced. For new businesses BCCI suggested insurance commission should be 20 per cent while for renewals it should be 15 per cent.

In order to encourage development of new sectors and improve penetration in social and rural sectors, there should be differential rates of commissions ranging from 25 per cent in first year to 10 per cent for renewals.

BCCI was of the opinion IRDA should develop a module and a mechanism for monitoring product advertisements by insurance companies. This was necessary as misleading claims were being made in advertisements to the detriment of the common consumer.