Delay in wage hike for insurance staff likely

New Delhi, March 21 | Updated: Mar 22 2005, 05:40am hrs
Employees of state-owned insurance companies may have to wait longer for a compensation package on par with bank employees. A legal hurdle is all set to delay the wage hike for insurance employees. Under Section 40C of the Insurance Act, insurance companies are bound to keep their expenses at or below 19.5% of the total earned premium. Most companies have already exceeded the limit by about 3-4%, and are not in a position to spend more for salaries.

Oriental Insurance Companys chairman and managing director M Ramadoss said that though negotiations are on with the government, the relevant Section has to be amended. Section 40C is irrelevant in the present context, there is a need to amend this, he said.

However, it is understood that negotiations on wage hike is still on with the government. Wage hike of employees is due since 2002. Earlier the government had promised to settle it by November, last year. It may be noted that the employees in the banking sector have got a hike of 13.5%.

Insurance sector employees have demanded that their wage hike be in line with the bank employees. The employees of the general insurance companies have also decided to go on strike on March 23 and 24 in protest of the delay in announcing their wage hike.