Centre to assist PSU insurance firms to create social safety net for poor

Our Bureau

Mumbai, Sep 12: Finance Minister Yashwant Sinha on Wednesday said the government will provide assistance to public sector insurance companies to create social safety net schemes for the underprivileged sections of the society.

‘‘Economic reforms may not be able to take place in the absence of such a social security net,’’ Mr Sinha said while inaugurating Life Insurance Corporation’s extended wide area network (WAN) here.
The country is deficient in the area of social security and, if any mishap were to happen or a job loss, it should be possible for the society to take care of such incidents, felt Mr Sinha.

The government was also discussing the Oasis report on the social safety net and how it can be implemented, he said. Mr Sinha also expressed hope that LIC would emerge as a major multinational organisation in the coming years.

The finance minister also suggested that the domestic IT industry which is catering to the large overseas market can gradually expand its business in the dometic market particularly in the financial sector which is undergoing a major technological tranformation.

Later, Mr Sinha, while inaugurating New India Assurance Company Ltd’s ‘‘business credit shield’’, a new credit insurance policy, said it was good to see public sector insurance companies coming out with new products and initiatives in the competitive scenario.

‘‘Public sector insurance companies have the capacity and the capability to meet the changes in this environment,’’ he said..

There can be instances of defaults in payments and the insurance firms have to exercise a great deal of caution to contain such instances through information inputs, cautioned Mr Sinha.

This new policy addresses the needs of the trade and industry and would enable them to conduct businesses with a greater degree of assurance, he added. New India Assurance chairman and managing director KN Bhandari said credit insurance provides business with protection against the failure of customers to pay their debts - losses due to insolvency and payment defaults of its customers.