CLC urges govt action on PSGIC demands

The association has also urged the government to merge the four PSGICs into a single entity and to address concerns related to GST on insurance premiums, manpower shortages, and irregularities in hospital and TPA operations

Despite a conciliation meeting led by the Chief Labour Commissioner (CLC) with trade union leaders of Public Sector General Insurance Companies (PSGICs) on August 27, the CLC has written a letter to the Department of Financial Services to address the long-standing demands of PSGIC employees and accelerate action on them

The General Insurance Employees All India Association (GIEAIA) has urged the Government to have parity with LIC in wage revision, which is due for PSGIC employees since August 01, 2022. The wage revisions have been implemented across the financial sector, except the Public Sector General Insurance Companies (PSGICs). Employees in the banking sector and the Life Insurance Corporation of India (LIC) have already received their wage revisions. It has been nearly 24 months without any progress on implementing the pending wage revision for PSGIC employees, which is essential for ensuring their motivation and well-being.

Talking to Bizz Buzz, Trilok Singh, general secretary, GIEAIA says, “We are quite hopeful about tomorrow’s conciliation meeting to bear some fruit. In case, we find nothing there then we will be compelled to go for a nationwide agitation and strike in the near future.”

The pending revision, effective from 1st August 2022, should include an increase in the employer's contribution to the NPS to14 per cent, uniform improvement of the family pension at the rate of 30 per cent, and other benefits in line with LIC, he said.

The financial results of PSGICs for the financial years 2022-23 and 2023-24 show significant improvements despite challenges such as higher losses from major social welfare policies. We once again request parity with LIC in wage revision, allowances, NPS contributions, and pensioner benefits, he said.

The GIEAIA has also urged the Government to merge 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.

This merger would eliminate inter-company competition within the public sector, enabling these companies to perform better and fulfil their social obligations and government policies, such as the Pradhan Mantri Fasal Bima Yojana, Rashtriya Swasthya BimaYojana,Pradhan Mantri Suraksha Bima Yojana, Ayushman Bharat, Pradhan Mantri Jan Arogya Yojana, and other social schemes, the Association’s letter to Union Finance Minister, Nirmala Sitharaman says.

The inordinate delay in the merger, coupled with unhealthy competition, has resulted in a decline in the growth and market share of these companies. A merged entity would be stronger, better equipped to face challenges posed by private players, and more capable of providing efficient services to the common man, he said.

In the Budget 2020-21, your good self-announced the ‘New Public Sector Enterprise (PSE) Policy for Atmanirbhar Bharat,’ which classified banks, insurance, and financial services as one of the four strategic sectors, with the aim of strengthening PSGI companies.

Both life insurance and medical insurance premiums currently attract a GST rate of 18 per cent.

Tridib Mukherjee, general secretary, eastern zone, GIEAIA, said, “We also waiting to hear in case any positive response has come from the SFS on our demand during tomorrow’s meeting.”

The GST burden on policyholders undermines the primary objective of life and health insurance, which is to provide financial security and support during unexpected events such as illness, accidents, or untimely death. This burden is particularly heavy on common people and senior citizens. Recognizing the significance of this issue, the Parliamentary Standing Committee on Finance of the 17th Lok Sabha, headed by former Minister of State for Finance Jayant Sinha, recommended the rationalization of GST on insurance products, especially health and life insurance. We, therefore, request your good self to consider withdrawing GST on life and medical insurance premiums in the interest of policyholders and citizens at large, he said.

PSGICs have been performing better despite inadequate manpower, but the decreasing employee strength year after year without corresponding recruitment has led to extremely high work pressures. Employees are handling an increased number of documents, claims, and processes, leading to increased productivity per capita on a year-on-year basis. However, this increased workload has disrupted their work-life balance. Equitable and just compensation must be ensured to keep them motivated. Additionally, we call for the immediate filling of over 20,000 vacant positions in PSGICs. The current lack of sufficient staffing has caused significant challenges within these companies, leading to operational difficulties and inefficiencies. As a result, many offices have been forced to close or merge, negatively impacting the services provided to the citizens at large.

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.