The new mortality table was recently completed by the Mortality and Morbidity Investigation Centre (MMIC) set up by the Life Insurance Council the umbrella body of insurers and the Institute of Actuaries of India after three years of studying data from 15 life insurers. The table, which has been prepared for the first time in the liberalised insurance industry to help the life insurers assess life risks and fix premium, was sent to Irda for its ratification so that the it could officially be used by life insurers.
However, R Kannan, the outgoing member (actuary), Irda confirmed that the insurance regulator will ask the MMIC to rework the mortality report. We want the MMIC to rework the report before it is used by the life insurance industry, Kannan said. Irda wants the report to be reformulated on three fronts.
First, the report should have more comprehensive data and analysis on the Indian population above 45 years. Second, the report has not provided any linkage between the earlier report prepared by the Life Insurance Corporation (LIC) in 1994-96, which linkage Irda wants to be in place. Third, Irda wants to know how the new mortality table will affect pricing and reserves of life insurers.
The report, prepared by eminent actuary KP Sarma, CEO, MMIC, had shown that the improvement in Indian longevity has been spectacular in the 1970s and 1980s, but slowed in the 1990s and 2000s.
There has been an increase in temporary life expectancy up to age 60, in all states, mostly due to improvement in mortality among infants and children.
Despite improved living standards and socio-cultural situation, changed lifestyles led to higher levels of stress, particularly in middle age. This could be a cause for low percentage of improvement in the age range of 34 to 50.
The report suggests newly emerging health threats such as AIDS, returning infectious disease, and growing burden of chronic diseases and injuries need greater attention.
There can now be a difficult epidemiologic transition towards a struggle with health problems in adulthood that are much more difficult to treat or prevent, cautions the report.
Andhra Pradesh, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Karnataka experienced the highest mortality rate while Orissa, West Bengal, Sikkim, Delhi, Kerala, Andaman & Nicobar and Lakshadweep have the lowest mortality rates.
MMIC also plans to take up investigation in other areas like mortality of annuitant lives and mortality of lives insured under unit-linked insurance plans.