Secure And Strengthen Public Sector Insurers For The Cause Of India’s Financial Eco-System- WFTU APRO To FM Nirmala Sitharaman

The Trade Unions of Public Sector General Insurance Companies and its employees are agitated with regard to the prevailing situation, which has become a challenge for the existence of these Public Sector Companies. The Leaders of the General Insurance Employees All India Association, Amarjeet Kaur, Binoy Viswam Ex-MP, and Trilok Singh, on several occasions, met the Finance Minister Nirmala Sitharaman and pressed for implementing the various demands of the Insurance Sector Employees.

The Association was also agitating for quite some time as their wages revision settlement is under conciliation process with the Chief Labour Commissioner, Central. In this background, C. Srikumar, Deputy General Secretary of World Federation of Trade Unions (WFTU) and In-charge of the Asia Pacific Regional Office, has submitted a representation to the Union Finance Minister Nirmala Sitharaman in which the 08 major issues concerning the Public Sector General Insurance Companies and their employees are given in detail.

WFTU APRO has appealed to the Finance Minster to consider all these issues in its true perspective and take appropriate decision to strengthen the Public Sector Insurers and secure their role in India’s financial eco-system.

www.indianpsu.com accessed a copy of WFTU APRO representation, dated 18-01-2025, addressed to Finance Minister, Nirmala Sitharaman, and the same is published here for the information of our viewers.

Ref.WFTU/APRO/Corr./GOI/25 Date.18-01-2025

To
Smt. Nirmala Sitharaman Ji
Hon’ble Finance Minister,
Government of India,
North Block,
New Delhi – 110 001.
Respected Madam,
Sub:- Request to address the Critical Challenges faced by the Public Sector General Insurance Companies (PSGICs) – Reg

On behalf of the Asia Pacific Regional Office of World Federation of Trade Unions (WFTU), we wish you a very happy and prosperous New Year 2025. We take the liberty of bringing the following issues of the Public Sector General Insurance Companies of India and its employees to your kind notice. You will appreciate that the PSGICs have played a vital role in the National Development. However, this sector at present suffers from severe Financial Instability and Organizational inefficiency caused by prolonged mis-management and the policies being adopted by the Government. The move of the Government to further liberalize the Insurance sector by introducing a bill to increase the FDI in the sector is causing a severe threat to the existence of the Insurance Companies in the Public Sectors. In this backdrop we submit the following issues agitating the minds of the Insurance Sector Employees for your favourable consideration and decision please.

Opposition to 100% FDI in the Insurance Sector

We strongly oppose the proposal to allow 100% FDI. Historical evidence suggests that increasing FDI limits has not significantly improved insurance penetration but has primarily enabled profit repatriation.

Allowing full foreign ownership would further marginalize public sector insurers and undermine their crucial role in serving rural and semi-urban markets, which private players often neglect. Government statistics indicate that only 32.67% of the existing 74% FDI cap has been utilized, highlighting limited demand for such capital. This policy, therefore, requires reconsideration in the national interest.

Merger of Public Sector General Insurance Companies

We recommend consolidating PSGICs into a single, robust entity to eliminate internal competition, reduce unhealthy pricing practices, and enhance market penetration across urban, semi-urban, and rural areas. A merged structure would streamline operations, improve service delivery, and enhance efficiency.

Capital Infusion for Expansion

Adequate capital support is critical for PSGICs to effectively implement key social security schemes, including:

• Pradhan Mantri Fasal Bima Yojana
• Rashtriya Swasthya Bima Yojana
• Ayushman Bharat, among others.
  Such investment is essential to meet the Government’s socio-economic objectives and improve outreach to underserved populations.

Ensuring a Level Playing Field in the Insurance Market

We urge the government to enforce stricter regulatory measures to ensure fair competition.

Adherence to guidelines issued by the Insurance Regulatory and Development
Authority of India (IRDAI) is vital to safeguard policyholders and maintain market
stability.

Revised Capital Norms for New Insurers

While lowering the capital requirement from INR 100 crores to INR 50 crores and reducing the net owned funds requirement from INR 5,000 crores to INR 1,000 crores could attract smaller players, this must be approached cautiously. Care must be taken to avoid the re-emergence of exploitative practices reminiscent of the pre-nationalization era.

Uniform Pension Benefits as per CCS Rules

PSGICs still lack uniformity in pension benefits. Many families receive only a 15% family pension, compared to the 30% provided in other government sectors, creating an anomaly.

Immediate Settlement of Long-Pending Wage Revision

The wage revision due since August 2022 remains unresolved despite multiple discussions at GIPSA, DFS, and even with the Hon’ble Finance Minister. Clear directives from the Chief Labour Commissioner (CLC) have also been ignored. We urge immediate action to settle this overdue issue.

Immediate Recruitment Across All Cadres

Large-scale retirements over the past decade, combined with a lack of fresh recruitment, have led to an acute staff shortage, affecting customer service and back- office operations. Immediate recruitment across all cadres is essential to improve service delivery and operational efficiency.

We are confident that your honour will examine all the above issues in its true perspective and take appropriate decision to strengthen the Public Sector Insurers and secure their role in India’s Financial eco system.
Awaiting for your favourable response, please.

Thanking you.

Yours Sincerely,

C. SRIKUMAR
Deputy General Secretary
WFTU & Incharge
Asia Pacific Regional Office, New Delhi.