Union Finance Minister Pranab Mukherjee on Wednesday urged the insurance industry to accelerate micro-insurance to promote financial inclusion.

“Micro-insurance is the essential factor of financial inclusion”, said Mr. Mukherjee while addressing the Global Insurance Summit, organised by Associated Chambers of Commerce and Industry of India (Assocham) here. He called upon the leaders of the insurance industry to broadbase the insurance market to cover rural and semi-urban areas.

The Finance Minister said the UPA Government had laid a special emphasis on insurance and had launched Aam Admi Bima Yojana, Jan Shree Bima Yojana, Rashtriya Swasthya Yojana and crop insurance scheme to protect and economically empower weaker sections of the society. He observed that the health insurance covered miniscule percentage of the population and called for a big push to promote it. The Finance Minister said there was an urgent need to step up outreach programmes to create greater awareness about the insurance products.

Speaking about the role of insurance in disaster management, he said “insurance plays a key role in mitigating the losses arising out of disasters. Our insurance companies must explore international re-insurance markets to protect their interests and render services.”

The Finance Minister commended the Insurance Regulatory Development Authority (IRDA) for having laid down a strong regulatory framework. He said the new ULIP norms, which have come into force from today [Wednesday], are aimed building investor confidence. Mr. Mukherjee said “reforms are not static and they must keep flowing.”

The Finance Minister also said insurance was a technology-driven sector and the players must adopt all modern technology and hold regular skill upgradation programmes for their personnel. He said technology holds the promise of cutting costs, whose end-result would be the reduced cost of premium for the general public.

J. Hari Narayan, Chairman, IRDA, spoke about the trends in the Indian insurance sector, while T. S. Vijayan, Chairman, LIC, made a presentation about the role played by his organisation in the development of insurance market.

The Finance Minister cut the ceremonial cake to mark the 54th birth anniversary of LIC, which was celebrated on September 1.

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