This refers to the report "Customers in smaller cities to have better access to insurance, courtesy Budget proposals" (March 12). As an old insurance hand, I believe it is a laudable step. Right from its nationalisation in 1956, life insurance has been envisaged as a mode for canalising savings of people, especially in the context of the then ensuing Second Five-Year Plan. As against some 97 centres in which private insurers were operating then, LIC started 300 new branches. As agents played the most important role, in 1969, all branches were required to maintain a record of areas with a population of more than 1,000, under their jurisdiction, that did not have an agent. And during the mandatory annual inspection, officers were required to report on obtaining agents in those areas concerned. At the time, insurance officers claimed that barring villages in the Himalayan region and some parts of Rajasthan, every village with a population of more than 1,000 had at least one LIC agent. Recently, it was reported that in the last three years, private insurers closed down 300 branches. But there was no reaction from the government. As for the bancassurance method to accelerate the spread of insurance, which is the current flavour in India, it needs to be said the western nations, which have for the last 35 years talked of bancassurance, and of walls between various sectors of financial services crumbling, have begun to consider the virtue of companies confining themselves to their core areas.
S Subramanyan Navi Mumbai
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