Innovative insurance policies: Made in India, but not for India

December 20, 2004

Made in India, but not for India

TIMES NEWS NETWORK [ FRIDAY, DECEMBER 17, 2004 12:36:36 AM ]

PUNE: The National Insurance Academy (NIA) here has smashed a myth

in the industry. A slew of AIDS insurance policies designed by the

academy have turned out to be a hit in eight African nations, where

AIDS is pandemic, calling into question the domestic industry's

reluctance to enter the area. Though India has a huge AIDS

population, none of the 14 life insurance companies in the country,

including LIC, offer AIDS cover, as actuarial norms perceive it as

pandemic and 'tontine' (business without profits).

Split into two categories, these policies were designed by the

academy for the Banjul, Gambia-based Western African Insurance

Institute (WAII), an industry body in the region, for its social

security system, NIA director K.C. Mishra told TNN. One category -

clean-up fund, family maintenance and specialised funds - focus on

the funding needs of the dependants of AIDS patients.

Expenses on the patient's funeral, rites and stigma-related issues

are covered under the clean-up fund. The family maintenance fund

provides for pension and specialised funds cater to social functions

like marriages in the family.

The other category, called switch policy, enables a person to

transfer his policy as a term policy to the next of his kin, if he

catches AIDS while a policy is running.

While Indian companies are still fighting shy, WAII is planning to

take the NIA-designed policies to other parts of Africa and are in

negotiations with various governments.

The NIA, on in its part, are in talks with the Cairo-based

Federation of Afro-Asian Insurers and Re-insurers.

" These schemes can be easily implemented in India as well. But no

company has approached us so far. If the government wants to

implement it, the initiative should come from the regulator. " Is the

IRDA listening?

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