Date:26/01/2005 URL: http://www.thehindu.com/2005/01/26/stories/2005012612260800.htm

Tamil Nadu - Chennai

Bid to deny due wage revision: insurance officers

By Our Special Correspondent

CHENNAI, JAN. 25. General insurance officers have protested to the General Insurance Public Sector Association (GIPSA), umbrella organisation of managements of public sector insurance companies, against attempts to deny due level of wage revision citing grounds that are a ``result of policies pursued by the Government and the GIPSA''.

In a recent communication, the Oriental Insurance Company Officers Association said allowing unethical rebating by private sector companies, leading to a loss of profitable portfolios to the private sector, failure to get tariffs for motor insurance revised in tune with risks and creation of alternative channels of distribution were the result of the government policies and failures.

Addressing a press conference here, J. Cyril, association president, said that despite these negative factors, the public sector companies gave a good account of themselves as was evident from their annual reports and dividend declared to the Government.

Mr. Cyril said while the officers were prepared to discuss the issues in the interest of the company, attempts during the ongoing wage negotiations to deny justice to officers and offer them hikes less than those made in the banking and life insurance sectors would not help in arriving at an amicable solution. The Government was consistently refusing to offer a vision or roadmap for strengthening the public sector insurance companies as promised by it. It also refused to consider suggestions for either the merger of the four companies or starting zone-wise companies.

Mr. Cyril said the refusal by the regulatory authority to allow direct discounting of premium to corporate customers by public sector companies as had been the practice for long and forcing them to pay commissions to intermediaries was propping up private sector players. The private sector companies had not fulfilled the claim made by policy-makers at the time of opening up of the sector that the companies would expand the market and take aggressively to marketing of personal products. At the same time, the Government imposed a restriction on the advertisement and publicity budget of public sector insurers to one per cent of the premium income. The private sector was resisting detariffing of more lines of products for fear of competition from the public sector, he said.