General insurance employees union seeks wage revision on parity with LIC

The General Insurance Employees All India Association (GIEAIA) has called on the government to ensure wage parity with LIC for employees of Public Sector General Insurance Companies (PSGICs), whose wage revision has been pending since August 1, 2022.

Despite wage revisions being implemented across the financial sector, including in the banking sector and Life Insurance Corporation of India (LIC), PSGIC employees have yet to see similar progress. The nearly 24-month delay in addressing this issue has raised concerns about the motivation and well-being of these employees.

A conciliation meeting between trade union leaders and the Chief Labour Commissioner (CLC) on August 6 failed to reach a resolution, with the next meeting scheduled for August 27. Speaking to Bizz Buzz, Trilok Singh, General Secretary of GIEAIA, emphasised that the overdue revision should include a 14 per cent increase in the employer's contribution to the NPS, uniform family pension improvement at the rate of 30 per cent, and other benefits on par with LIC.

The financial results of Public Sector General Insurance Companies (PSGICs) for the financial years 2022-23 and 2023-24 have shown significant improvements, despite challenges such as increased losses from major social welfare policies. Nevertheless, GIEAIA continues to urge the government for parity with LIC in wage revision, allowances, NPS contributions, and pensioner benefits.

Additionally, the GIEAIA has reiterated its call for the merger of the four Public Sector General Insurance (PSGI) companies—National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited, and United India Insurance Company Limited—into a single, unified entity.

The association believes that this merger would eliminate inter-company competition within the public sector, allowing these companies to perform more effectively while fulfilling their social obligations and implementing government policies such as the Pradhan Mantri Fasal Bima Yojana, Rashtriya Swasthya Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, Ayushman Bharat, and Pradhan Mantri Jan Arogya Yojana.

In a letter to Union Finance Minister Nirmala Sitharaman, the association expressed concerns over the inordinate delay in the merger, which, combined with unhealthy competition, has led to a decline in growth and market share for these companies. A merged entity, they argue, would be stronger, better equipped to face challenges from private players, and more capable of providing efficient services to the public.

The association also highlighted the high GST rate of 18 per cent on both life and medical insurance premiums. Darshan Kumar Wadhwa, Secretary General of GIEAIA CLASS-I, said, “Individuals seeking to protect their families from life's uncertainties should not be burdened with additional taxes on their premiums. Similarly, the 18 per cent GST on medical insurance premiums deters the growth of this essential segment and limits the inclusion of more people under the social security net.”

The association noted that the GST burden undermines the primary objective of life and health insurance, which is to provide financial security during unexpected events such as illness, accidents, or untimely death. This burden is especially heavy on common people and senior citizens. The Parliamentary Standing Committee on Finance of the 17th Lok Sabha, led by former Minister of State for Finance Jayant Sinha, has recommended the rationalization of GST on insurance products, particularly health and life insurance. The GIEAIA, therefore, requests the withdrawal of GST on life and medical insurance premiums in the interest of policyholders and citizens at large.

Despite their improved performance, PSGICs are struggling with inadequate manpower. The consistent decline in employee strength without corresponding recruitment has led to high work pressures. Employees are handling an increasing number of documents, claims, and processes, resulting in higher per capita productivity year after year. However, this increased workload has disrupted their work-life balance. The GIEAIA emphasized the need for equitable and just compensation to keep employees motivated. Additionally, they called for the immediate filling of over 20,000 vacant positions in PSGICs. The current staffing shortages have caused significant operational challenges, leading to office closures or mergers, which have adversely impacted the services provided to the public.

The Association has expressed serious concerns regarding the gross irregularities and nexus between TPAs and hospitals, which are resulting insignificant financial losses to PSGICs. The CAG report on this matter, which highlights the misappropriation of crores of rupees and various other irregularities, was submitted to the Committee on Finance. The report expressed severe concern and urged the corporate management of PSGICs and the Department of Financial Services (DFS) to take corrective measures.

The Association, therefore, has strongly demanded the formation of a regulatory authority to oversee hospitals and TPAs, to curb these irregularities in the interest of PSGIC policyholders and citizens at large.