New Delhi, March 20: Siddhartha Mohanty, CEO and MD of Life Insurance Corporation of India (LIC), stated on Thursday that the nation's largest insurer has consistently focused on reaching rural areas and economically and socially disadvantaged sections. This assertion came a day after a delegation of LIC agents met with the Leader of Opposition in the Lok Sabha, Rahul Gandhi, to raise concerns regarding recent rule changes that could make insurance less affordable for the poorest.
Mohanty firmly denied those concerns, stating, "We aim to extend financial protection to every insurable individual at an affordable cost." He emphasized the company's commitment to align with the New Product Regulations set forth by the Insurance Regulatory and Development Authority of India (IRDA), effective from October 1, 2024, stating, "We want to clarify that LIC has introduced products that align with these regulations, keeping policyholders' interests at the forefront."
Mohanty highlighted that LIC is dedicated to broadening life insurance coverage with a diverse portfolio catering to various customer segments across society. Pointing specifically to the company's 'Micro Bachat' plan, he noted, "Our 'Micro Bachat' plan offers a minimum sum assured of Rs 1 lakh and is exempt from GST, ensuring accessibility." He also reassured that post regulatory changes, the commission structure for agents has not been reduced but rather staggered to maintain support for their financial well-being.
In discussions with the LIC agents, Rahul Gandhi remarked on the founding principles of LIC, which was established in 1956 to offer affordable insurance to all Indians. He assured the LIC agents that he would take their concerns to Parliament, emphasizing the historical significance of the institution in promoting financial inclusion.
Recent data from the industry indicates that LIC has continued to thrive despite these regulatory changes, recording a 28.29 percent surge in group yearly renewable premiums and a 7.9 percent rise in individual premiums during the first eleven months of FY25. As of February 2025, LIC's total premium collection reached approximately Rs 1.90 lakh crore, reflecting a 1.90 percent increase from the Rs 1.86 lakh crore collected during the same period in FY24.
The company's strong performance underscores its resilience and commitment to offering insurance solutions to all corners of the Indian society, ensuring that adequate financial protection is accessible to even the most vulnerable populations.
As Mohanty stated in his remarks, the financial inclusion mission of LIC remains steadfast. "We strive to provide financial protection to each insurable individual at an affordable price," he reiterated. This commitment to affordability is central to LIC’s operations as it seeks to foster trust and security among its policyholders.
Meanwhile, as discussions unfold between agency representatives and political figures like Rahul Gandhi, there is a broader conversation about how to balance regulatory compliance with the need for affordable insurance in India. The stakes are high, as the ability to protect vulnerable populations financially depends on ensuring that insurance products remain viable and accessible.
Moving forward, the dialogue between LIC’s management and political stakeholders will be crucial in shaping India’s insurance landscape, especially in light of changing regulations. The challenges posed by these new rules may encourage innovation in product offerings to better serve the needs of the underserved markets.
In a rapidly evolving market where financial literacy is increasing, the role of LIC as a provider of affordable insurance remains as vital as ever. The upcoming discussions in Parliament, initiated by Gandhi, may serve as a harbinger of change and could potentially lead to reassessment of the policies affecting the insurance sector.
The resilience of LIC in maintaining its premium growth and commitment to reaching underserved populations is noteworthy and reflective of a broader trend towards ensuring that life insurance is an essential component of financial planning for Indians across all strata of society.
Through proactive engagement with its agency force and responsive updates to its product offerings, LIC positions itself as a model for other institutions aiming to expand coverage in similar demographics.
The weeks ahead will be pivotal for LIC as it balances internal operational adjustments with external regulatory expectations, navigating the fine line of meeting its original mission while adapting to new challenges. The figures detailing premium growth highlight LIC's strong foothold in the market, showcasing its role as a leader in promoting financial security nationwide.
In the context of licensing and insurance accessibility, the significant measures discussed could reshape how LIC interacts with its agency force and policyholders moving forward.
