The insurance authority of India has made public a report that calls for the urgent implementation of changes that would expand microinsurance across the country.
Providing international examples, the report of the Committee on Standalone Microinsurance Company makes recommendations to the Insurance Regulatory and Development Authority of India (IRDAI) on the desirability and feasibility of standalone microinsurance companies.
“For low-income families, calamities such as illnesses, accidents, death or the loss of assets often have very grave financial consequences. Such events can push these families deeper into poverty as their meagre resources get depleted. Many get drawn into debt traps as they borrow beyond their means, sell productive assets, take children out of school or put them to work, compromise on food, or leave sickness untreated,” says the report signed by committee chair Mirai Chatterjee and members.
“The need for low-income families to take insurance, therefore, cannot be emphasized enough, and must be a vital part of India’s financial inclusion plan.”