PSU insurers to seek North Block nod for Rlys cover plan

The four public sector general insurance companies will seek the Union finance ministry's permission to pitch for the personal accident benefit insurance business that would be offered by Indian Railways to its unorganised labourers.

The railway Budget for 2004-05 has proposed an accident cover for unorganised workers who work for Railways.

The insurance firms will pitch for the business through the General Insurance (Public) Sector Association, which represents the management of the four government-owned general insurance firms.

"We will compete for the entire accidental insurance benefit or at least a portion of it," said National Insurance officials.

The four general insurance companies "" Oriental Insurance, New India Assurance, United India Insurance and National Insurance "" feel the ministry's proposal was attractive from the business point of view.

"With the number of contract labourers running into few millions in the railways, this would be a profitable proposition for all general insurance firms," the source said.

"It has been found that life expectancy of contract labourers has been on the rise in the last number of years. Further, these labourers also have relatively better life expectancy than normal people which would translate into the fact that the claim-ratio of this segment would make it a viable business proposition," sources in public sector insurance firms said.

"The modalities of the insurance claim in terms of premium payment have to be worked out jointly with the railway ministry," officials said.

"It is likely that the railway ministry would tap the Unorganised Workers Social Security Fund for premium payment for the insurance benefit," he said.

The railway ministry has already framed a social security scheme for the unorganised workers which was being implemented in 50 districts on a pilot basis.

Under this scheme there was a provision for health insurance through the universal insurance scheme, a personal accident insurance cover of Rs 1 lakh and a minimum old-age pension of Rs 500 per month on attaining the age of 60 years.

This scheme would now be extended to all such contract labourers leaving huge scope for the general insurance companies.

All unorganised labourers coming into contact with the Railways such as licensed porters, vendors, hawkers, people working in stalls, cycle stand, construction workers would be eligible for the scheme.