The insurance regulator has written to the government seeking changes in provisions of the Direct Taxes Code (DTC) which mandates a minimum level of cover on a life policy.
Speaking on the sidelines of the 14th Global Conference of Actuaries in Mumbai on Monday, IRDA chairman J Harinarayan said that there are some provisions in the DTC which it felt were not in the best interest of the industry. “DTC has proposed that life cover should be 20 times the (annual) premium. We are saying that it should be 10,” said Harinarayan.
The DTC is a new tax legislation that provides tax relief and eliminates exemptions. It is also one of the big challenges that the life insurance industry will have to deal with as it removes tax exemptions on maturity benefits. Besides this, it would also reduce the scope of retirement benefit products sold by the industry as it prescribes a life cover which is 20 times the annual premium for a life policy to be eligible for tax breaks. If the government retains the cover at 20 times premium, several endowment products will be unaffordable for older people.
Earlier, delivering the valedictory address at the conference, Harinarayan said that general insurance companies could look at importing actuarial talent from overseas given the shortage of non-life actuaries in India.
Actuaries are professionals who help insurers price their covers by measuring probabilities and working out future liabilities. InIndia, the non-life industry was nationalized with the entire industry being absorbed by four companies under the General Insurance Corporation four decades ago.
[Source - TOI]
Possibly Related Posts:
- LIC launches its first online, immediate annuity plan
- 5 health insurance changes you must know
- Insurers scrap sub-limits in health policies
- Insurance is for protection, not wealth creation
- General insurers clock a 23% growth in premium income during FY-12
- Bharti AXA aims to double its business in south by year end
- Irda bats to make life products tax-efficient
- Life cover policy forms to be more interactive
- Will your insurance policy get tax benefits
- Good policy communication is responsibility of insurer: IRDA