CHAPTER - 11

RURAL AND SOCIAL SECTORS

PRESENTED BY NEHA A. DIVEKAR, A.A.O P&GS DEPARTMENT, C.O.

RURAL AND SOCIAL SECTORS

LEGAL PROVISIONS SECTIONS 32B AND 32C HAVE BEEN ADDED TO THE INSURANCE ACT, 1938, VIDE PARA 19 OF THE FIRST SCHEDULE OF THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT, 1999

RURAL AND SOCIAL SECTORS

LEGAL PROVISIONS
32B INSURANCE BUSINESS IN RURAL OR SOCIAL SECTOR

MANDATORY FOR ALL THE INSURERS TO UNDERTAKE LIFE INSURANCE OR GENERAL INSURANCE BUSINESS IN THE RURAL OR URBAN SECTOR

LEGAL PROVISIONS
32C. OBLIGATIONS OF INSURER
EVERY INSURER HAS TO PROVIDE LIFE INSURANCE POLICIES TO THE PERSONS RESIDING IN THE RURAL SECTOR, WORKERS IN THE UNORGANIZED OR INFORMAL SECTOR OR FOR ECONOMICALLY VULNERABLE OR BACKWARD CLASSES OF THE SOCIETY AND OTHER CATEGORIES OF PERSONS AND SUCH INSURANCE POLICIES SHALL INCLUDE INSURANCE FOR CROPS.

NOTIFICATION OF REGULATIONS
THE REGULATIONS WERE AMENDED IN OCTOBER 1992 AND NOTIFIED IN THE OFFICIAL GAZETTE DATED 16.10.2002.
A FEW DEFINITIONS ARE GIVEN AS FOLLOWS :

DEFINITIONS

WHICH, AS PER THE LATEST CENSUS,

THE RURAL SECTOR - A PLACE IN

- THE POPULATION IS LESS THAN 5,000, - THE DENSITY OF POPULATION IS LESS THAN 400 PER SQUARE KILOMETER AND - MORE THAN 25% OF THE MALE WORKING POPULATION ARE ENGAGED IN AGRICULTURAL PURSUITS.

DEFINITIONS
AGRICULTURAL PURSUITS are defined as cultivation, agricultural labour, work in livestock, forestry, fishing, hunting, plantation, orchards, and allied activities. THE SOCIAL SECTOR is defined as including the unorganized sector, the informal sector, the economically vulnerable or backward classes and other categories of persons, both in rural and urban areas.

DEFINITIONS

is defined as including self-employed workers such as agricultural labour, beedi workers, brick kiln workers, carpenters, cobblers, construction workers, fishermen, hamals, handicraft artisans, handloom and khadi workers, lady tailors, leather and tannery workers, papad makers, powerloom workers, physically handicapped self-employed persons, etc.

UNORGANIZED SECTOR

DEFINITIONS
THE INFORMAL SECTOR
is defined as the small scale, self-employed workers typically at a low level of organization and technology, with the primary objective of generating employment and income with heterogeneous activities like retail trade, transport, repair and maintenance, construction, personal and domestic services, and manufacturing with the work being mostly labour intensive, having often unwritten and informal employer-employee relationships.

REGULATIONS REGARDING BUSINESS IN RURAL SECTOR

Insurers who begin to transact life insurance business in the year 2000 or later, are required by these regulations to write, in the rural sector, At least 7 % the total policies written direct, in the first financial year, going up to 9% in the second financial year, 12% in the third financial year, 14% in the fourth financial year and 16% in the fifth financial year.

REGULATIONS REGARDING BUSINESS IN SOCIAL SECTOR

With regard to the social sector, for private insurers the obligations are laid down as : 5000 lives in the first financial year, 7500 lives in the second financial year, 10000 lives in the third financial year, 15000 lives in the fourth financial year, 20000 lives in the fifth financial year.

REGULATIONS REGARDING BUSINESS IN SOCIAL SECTOR

With regard to existing insurers, the regulations provide that obligations would be decided by the IRDA after consultation, but the quantum would not be less than what had been recorded for the year ended 31.3.2002.

 There is a vast potential of more than 5 lakh villages in India with a total population of nearly 75 crores. Nearly 25% of them are below the poverty line compared to only about 7% in the urban areas. Nearly 1.5 crores households in the rural areas considered to have an annual income of Rs.50,000 or above. More than 3,500 branches of commercial banks operate in the rural areas, apart from the banks exclusively concerned with agricultural development.

POTENTIAL IN RURAL SECTOR

LICs BUSINESS IN RURAL SECTOR

The LIC's business from the rural areas had been increasing steadily. In 1997-1998, the business was more than 52% in number of policies and more than 42% in sum assured. This is apart from the business covered under group schemes in the social sector. The awareness about life insurance is not as low as it used to be some thirty years ago. The LIC had been doing intensive publicity through the mobile vans and other traditional as well as non-traditional media. The radio and television broadcasts reach almost every village through community sets.

The benefits of life insurance are needed most by people in this sector, as they are relatively poor and have very little savings, if at all.

NEED FOR INSURANCE IN SOCIAL SECTOR

Soon after nationalization of life insurance, this need was recognized and efforts were made to introduce what was called 'mass' insurances. The concept was to cover very large numbers of poor people in one scheme.

VARIOUS SCHEMES
LANDLESS AGRICULTURAL LABOURERS GROUP INSURANCE (LALGI). INTEGRATED RURAL DEVELOPMENT PROGRAM (IRDP). SOCIAL SECURITY GROUP SCHEMES (SSGS). RURAL GROUP LIFE INSURANCE SCHEMES (RGLIS). JANASHREE BIMA YOJANA (JBY). KRISHI SHRAMIK SAMAJIK SURAKSHA YOJANA (KSSSY). SHIKSHA SAHAYOG YOJANA (SSY).

Landless Agricultural Labourers Group Insurance Scheme - LALGI

LICS CONTRIBUTION IN THIS AREA STARTED WITH LALGI ( Landless Agricultural Labourers Group Insurance Scheme) FIRST MAJOR SOCIAL SECURITY SCHEME STARTED FROM 1ST APRIL, 1987. GUJARAT IS THE PIONEER STATE AGE LIMIT 18 yrs. TO 60 yrs. SUM ASSURED Rs.1000/PREMIUM WAS BORNE BY GUJARAT GOVT.

LALGI Contd...
GOVT. OF INDIA EXTENDED THE SCHEME THROUGHOUT THE COUNTRY ON 15TH AUGUST, 1987. WORLDS LARGEST GROUP SCHEME COVERING 1.2 Cr. LABOURERS. SUM ASSURED Rs. 2000/-

PREMIUM WAS PAID OUT OF SOCIAL SECURITY FUND ( THIS SCHEME WAS WITHDRAWN FROM 14TH AUGUST 2000).

(IRDP) - INTEGRATED RURAL DEVELOPMENT PROGRAMME

INTRODUCED IN 1988-89. COVER Rs.6000/- TO BENEFICIARIES OF IRDP. DOUBLE ACCIDENT BENEFIT NOW REPLACED BY SWARNAJAYANTI GRAM SWAROZGAR YOJANA. NO PREMIUM. CLAIMS SETTLED FROM SEPARATE FUND CREATED FOR THE PURPOSE.

Swarnajayanti Gram Swarojgar Yojana - SGSY

THE SCHEME IS ADMINISTERED THROUGH DISTRICT RURAL DEVELOPMENT AGENCY COMING UNDER ZILLA PARISHAD.

ALL THE PERSONS BETWEEN 18 AND 60 YEARS AND RECEIVING SUBSIDY / FINANCIAL ASSISTANCE / LOAN UNDER THIS SCHEME ARE COVERED UNDER THIS SCHEME FOR A PERIOD OF 5 YEARS FROM THE DATE OF DISBURSEMENT OF LOAN.

(SSGIS) SOCIAL SECURITY GROUP INSURANCE SCHEME

Cover up to Rs.5000/ Premium Rs.10/- per 1000 S.A. per member : - 50% by member/ Nodal Agency. - balance 50 % from SSF. Accident benefit - death/total disability Rs.25,000/- partial disability Rs.12,500/ 24 approved groups. No new schemes w.e.f. 10.8.2000 - old schemes only can be renewed.

24 APPROVED OCCUPATIONS
1 Beedi Workers 2 Brick Kiln Work 3 Carpenters 4 Cobblers 5 Fishermen 6 Hamals 7 Handicraft Artisans 8 Handloom Weavers 9 Handloom & Khadi Weavers 10 Lady Tailors 11 Leather & Tannery Workers 12 Papad Workers attached to SEWA 13 Physically Handicapped Self Employed Persons

24 APPROVED OCCUPATIONS
14 Primary Milk Producers 15 Rickshaw Pullers / Auto Drivers 16 Safai Karmacharis 17 Salt Growers 18 Tendu Leaf Collectors 19 Scheme for the Urban Poor 20 Forest Workers 21 Sericulture 22 Toddy Tappers 23 Powerloom Workers 24 Hilly Area Women

SOCIAL SECURITY FUND

SOCIAL SECURITY FUND CREATED IN 1988-89. USED TO SUBSIDISE PREMIUM. 50% FOR SOCIAL SECURITY GROUP SCHEMES. 100% PREMIUM TO COVER ACCIDENTAL BENEFITS (SSGS). 50% FOR JANASHREE BIMA YOJANA. KRISHI SHRAMIK SAMAJIK SURAKSHA YOJANA. 100% FOR SHIKSHA SAHAYOG YOJANA SCHOLARSHIP.

Rural Group Life Insurance Scheme (RGLIS)

THERE WAS ALSO THE RURAL GROUP LIFE INSURANCE SCHEME (RGLIS), LAUNCHED ON 15-8-1995 FOR RURAL POPULATION BELOW POVERTY LINE. AGE LIMIT 20 TO 50 yrs BENEFITS : RS. 5000/- PAYABLE ON DEATH BEFORE THE AGE OF 60.

Rural Group Life Insurance Scheme (RGLIS)

PREMIUM FOR AGE 20 TO 40 yrs Rs. 60/PREMIUM FOR AGE 40 TO 50 yrs Rs. 70/GENERAL AS WELL AS SUBSIDISED THE SCHEME WAS ADMINISTERED THROUGH ELECTED PANCHAYATS. 50 % SUBSIDY FROM STATE AND CENTRAL GOVT. IN EQUAL PROPORTION (IN RESPECT OF SUBSIDISED SCHEME) THIS SCHEME WAS WITHDRAWN W.E.F 01.04.2000

JANASHREE BIMA YOJANA

LAUNCHED ON 10TH AUGUST, 2000.

 Rural as well as urban population. Persons below poverty line and also marginally above the poverty line.

ELIGIBILITY

Between age 18 and 59 yrs.

Minimum group size 25. 42 occupations are identified so far.

42 OCCUPATIONAL GROUPS
1 Beedi Workers 2 Brick Kiln Work 3 Carpenters 4 Cobblers 5 Fishermen 6 Hamals 7 Handicraft Artisans 8 Handloom Weavers 9 Handloom & Khadi Weavers 10 Lady Tailors 11 Leather & Tannery Workers 12 Papad Workers attached to SEWA 13 Physically Handicapped Self Employed Persons

42 OCCUPATIONAL GROUPS
14 Primary Milk Producers 15 Rickshaw Pullers / Auto Drivers 16 Safai Karmacharis 17 Salt Growers 18 Tendu Leaf Collectors 19 Scheme for the Urban Poor 20 Forest Workers 21 Sericulture 22 Toddy Tappers 23 Powerloom Workers 24 Hilly Area Women

42 OCCUPATIONAL GROUPS
25 Food Stuffs like Khandsari / Sugar 26 Textile 27 Manufacture of Wood Products 28 Manufacture of Paper Products 29 Manufacture of Leather Products 30 Printing 31 Rubber & Coal Products 32 Chemical Products like candle manufacture 33 Mineral products like earthern toys manufacture

42 OCCUPATIONAL GROUPS
34 Agriculturists 35 Transport Drivers Association 36 Transport Karmacharis 37 Rural Poor 38 Construction Workers 39 Fire Crackers Workers 40 Coconut Processors 41 Aanganwadi Teachers 42 Kotwal

BENEFITS
NATURAL DEATH: - Rs.20000/- to the nominee ACCIDENT BENEFITS:

- On Death: Rs.50000/- to the nominee

- Total Permanent Disability: Rs.50000/- to the beneficiary. - Partial Permanent Disability : Rs.25000/- to the beneficiary.

PREMIUM
Rs. 200/- PER ANNUM OUT OF WHICH - Rs. 100/- PAYABLE BY MEMBER / NODAL AGENCY. - Rs. 100 FROM SOCIAL SECURITY FUND OF GOVT. OF INDIA.

ADMINISTRATION OF SCHEME
THE NODAL AGENCY ACTS FOR & ON BEHALF OF INSURED MEMBERS IN ALL MATTERS RELATED TO THE SCHEME. NODAL AGENCY MEANS STATE GOVT. , GRAM PANCHAYAT, NGO, SELF HELP GROUP OR ANY OTHER INSTITUTIONALISED ARRANGEMENT.

SETTLEMENT OF CLAIM

LIC SETTLES THE CLAIM BY SENDING THE A/C PAYEE CHEQUE FAVOURING THE BANKER OF THE BENEFICIARY / NOMINEE.

SHIKSHA SAHAYOG YOJANA

LAUNCHED ON 31ST DECEMBER,2001

BENEFITS CONTD.
Survival : lump sum at the end of every 10th year till the member attains 60 years of age. Pension (provided the member has paid

the premium at least for a period of 10 years) payable at age 60 on the basis

of the amount accumulated to the credit of the member and at least Rs. 100/per month.

ADMINISTRATION OF THE SCHEME

The scheme will be administered through Nodal Agencies. Nodal Agencies will be Gram Panchayat. Nodal Agencies will identify the agricultural workers & organize them in groups of 20 or more. Member wise running account will be maintained by LIC unit.

SETTLEMENT OF CLAIM
Claim papers will be submitted to LIC through the Nodal Agencies. LIC will settle the claim by sending Account Payee cheque directly to the beneficiary. Sale of new Schemes discontinued from December, 2003 but old Schemes can be renewed.

THANK YOU