AIIEA 23rd GENERAL CONFERENCE, NAGPUR

LIC - THE JEWEL OF INDIA

LIC – THE JEWEL OF INDIA

 PROTECT & STRENGTHEN IT

    The Life Insurance Corporation of India is entering into 58^th year of its glorious existence on 1^st September 2013. It has been a long and eventful journey of 57 years for LIC. Today LIC has grown from strength to strength to become one of the greatest financial Institutions of the country. It is now transforming itself into a gigantic Trans-National financial conglomerate. LIC is insuring the nation and ensuring smiles of people. Today, we are all proud to witness that LIC of India has completed 57 years of its glorious and purposeful existence in brightening the lives of millions. Moreover, it has played a pivotal role in mobilizing the savings of the people for nation building activities. Rightfully, LIC has emerged as 'Pride of India'.

LIC came into being on 1^st September 1956 in the background of nationalisation of insurance business on 19^th January 1956.  The government took the decision because the private insurance companies which were operating at that time were indulging in fraudulent practices. They were frittering away the monies of policy holders for their own selfish gains. The struggles unleashed by AIIEA since 1951 significantly contributed for the nationalization of life insurance business in our country and the emergence of public sector LIC. However, the public sector LIC had to face many a challenges from time to time in order to earn the trust and goodwill of policy holders. The sincerity, hard work, involvement and commitment of the dedicated team of employees and field force in catering to the needs of the policy holders could ensure what LIC is today- 'the Jewel of our country.'

In spite of the sterling performance by LIC, the votaries of neo-liberal economic policies decided to open up the insurance sector to both indigenous and foreign capital in the year 1991. With the passage of IRDA bill, in the year 1999, the industry was opened up to private and foreign capital. The pundits of neo-liberalism were under illusion that once the insurance sector is opened up, the public sector LIC would crumble and collapse. In fact, one leading financial daily also wrote an editorial then that LIC is a white elephant and would not be able face the competition. Another newspaper carried a heading “A Black Hole in LIC”. There were attempts overt and covert to weaken LIC and paint it red. But, LIC has never looked back. It proved all its detractors wrong. Adapting to the needs of the changed market environment, the LIC faced the competition like a true champion. Today, even after more than one decade of competition, LIC remains the market leader and emerged as a market maker. This could be possible only because of the single minded dedication and team work of all sections of employees and field force. The committed workforce both in office and in the field is straining every nerve to nurture and strengthen the public sector LIC.

Today, LIC has a market share of around 72% in premium income and around 81% in Number of Policies. As on 31-03-2013, LIC has a total income of Rs.3,26,341.88 crores and a total premium income of
Rs. 2,08,589.72 crores. The Life fund of LIC is at Rs.14,33,103.14 crores and its total assets are at Rs.15,60,481.84 crores. LIC has invested an amount of Rs. 9,21,371 crores in Government and Social sector. LIC has been one of the major contributors for the nation building activity of the government. In the first year of the 12^th Five year Plan, LIC has invested Rs.1,83,988 crores. We may note with pride that for the 11^th Five Year Plan, LIC has invested an amount of Rs.7,04,151 crores. LIC has settled last year around 1.70 crores maturity and survival benefit claims amounting to Rs 49,642 crores. It settled 7.26 lac death claims amounting to Rs 6390 crores. The out-standing maturity and death claims last year stood at a meagre 0.49% and 1.05% respectively. In fact, it is the best performance by LIC in last eleven years as far as settlement of death claims is concerned. This performance of claim settlement by LIC is par excellence and is unmatched in the insurance industry anywhere in the world. LIC is maintaining a solvency ratio of 154.15% as against the statutory requirement of 150%. It has a customer base of around 40 crores (both individual and group put together) and an agency force of around 11.73 lacs. We feel proud to be an integral part of the success story of this great financial behemoth. Further, we derive the satisfaction from the fact that our two decade long sustained campaign and struggles could protect and save the interests of LIC. The LIC Act (Amendment ) Bill 2009, which aimed to weaken public sector LIC could be successfully thwarted only because of the massive campaign and struggle unleashed by insurance employees under the banner of AIIEA.

The present economic situation of our country poses onerous challenges before LIC. The decline in domestic savings of our country is a matter of great concern to one and all. Escalating prices of essential commodities, petrol/diesel, Gas etc., are eroding the purchasing power of the common man. It is becoming very difficult for the common people to make both ends meet. It also is adversely impacting the savings of the people. Those who are in a position to save are getting inclined to park their monies in financial assets rather than financial savings because of the high rate inflation. Added to it, the difficulties encountered because of IRDA related matters. The LIC is deftly treading this difficult path and is trying its best to come out with flying colours. But it is matter of great irony that the government in order to overcome the present economic crises is further liberalizing the economy. Under tremendous pressure from both the international and domestic finance capital, the government is further opening up crucial sectors of the economy. As a part of it, the insurance sector is further sought to be opened up for Indian and foreign capital. This is an attempt aimed at providing more space to private capital to exploit the domestic savings of the people. The attempt of the government to pass the Insurance Laws (Amendment) Bill, 2008 in the present session of the Parliament is a pointer in this direction.

The situation demands that the employees be ever vigilant. Our campaign both “at the Seat and in the Streets” must be intensified. Let us discharge our responsibilities in the office by giving our best to the customers and compliment it in the streets by aggressively propagating the commendable performance and marvellous achievements of LIC. Today, when LIC is entering its 58^th year of purposeful and glorious existence, let every LICian take a pledge to protect and strengthen it on all fronts, aim for achieving its objectives and work for its eternal success and progress. We are confident that the insurance employees will envisage the challenges with proper understanding, engage themselves in campaign and struggle towards endeavouring the success of protecting public sector LIC.

Greetings to all the LICians on this joyous occasion

CHALLENGING THE CHALLENGES 

 DEFYING THE ODDS

EMERGING VICTORIOUS 

 THY NAME AIIEA

Our beloved organization AIIEA will be completing 62 years of its purposeful existence and entering the 63^rd year of its onward march on 1^st July 2013.  Insurance employees organized under the banner of AIIEA will be celebrating the formation day of AIIEA with lot of enthusiasm and joy across the country.  On this wonderful occasion, we extend our warm and revolutionary greetings to all the employees and their family members.

Since formation, AIIEA has been playing a pivotal role in not only protecting the interests of the employees and securing advancements in their service conditions, but also has played a very significant role in protecting and strengthening the public sector insurance industry.  It has contributed significantly for the growth of LIC and GIC which in turn has also contributed for the economic sovereignty of our country.   Formed with a vision and dream for an egalitarian society, the history of AIIEA is a saga of struggle, sacrifice and success. The AIIEA has today emerged as one of the most respected trade union in the comity of unions not only in India but across the globe. 

The history of AIIEA is punctuated with various glorious struggles.  AIIEA has always challenged the challenges and has defied all the odds and has emerged victorious in all its struggles.

Today when we celebrate the formation day of AIIEA, we are also confronted with many a challenges.  The attempts of the vested interest and the ruling class to weaken the public sector insurance and the attempt to increase the FDI limit and to privatize the public sector general insurance companies through Insurance Laws Amendment Bill 2008 is hanging like a Damocles Sword on us.  Through our consistent struggle for the last two decades, we have defeated the attempts of the government to weaken the public sector insurance.

However, we are confronting the International Finance Capital today. The government is under tremendous pressure from the foreign and indigenous capital to further open up the insurance sector. The growing Current Account Deficit (CAD) has become a matter of concern for the government. The falling exports, huge import bills, falling rupee value against dollar etc., are further adding to the concerns of the government. Added to these, the reverse outflow of capital (by FII’s) from our country has worsened the situation.  The finance minister has openly stated that attempts will be made to attract Foreign Direct Investment in all sectors (including Insurance) so as to bridge the gap of the Current Account Deficit (CAD), poses a serious challenge before us. We need to be alert and continue our campaign and struggle to defeat the nefarious designs of the government. We need to draw enthusiasm and inspiration from the successes of our struggles so far and also the growing united struggles of the working class of our country, which is bound to put pressure on the government. 

Unity thy name is AIIEA. In its glorious 62 years of journey, AIIEA always stood rock solid as a unifying force to rally all sections of employees into struggles. The secret of its success story reflects in the slogan which we consciously give “UNITY IS OUR STRENGTH”. When we are celebrating the 63^rd birth anniversary of AIIEA, the entire rank and file of our membership must take a pledge to nurture, protect and consolidate this unity that AIIEA achieved. For, there are attempts overt and covert by vested groups to disrupt the unity among employees for their ulterior motives.  

In fine, when we celebrate the formation day of AIIEA, let us take pledge to further strengthen the movement called AIIEA.  Also let us remember on this day the sacrifices made by our senior comrades who built this organization brick by brick through their sweat and toil and rededicate ourselves to further the movement. Let us qualitatively and quantitatively strengthen AIIEA on all counts so that it becomes a powerful weapon through which both the individual and collective interests of the stakeholders in the industry are advanced and protected.

AIIEA LONG LIVE

 AIIEA OUR STRENGTH 

 LONG LIVE EMPLOYEES UNITY.

10 Tv Logo Inauguration Ceremony 

on 14th December 2012, at Hyderabad

Creation:

GeeVee Rajahmundry

Desig:

GeeVee

Rajahmundry

56 years of Nation building

“LIC the pride of India”

On 1st September 2012, LIC completes 56 years of its glorious and purposeful existence. It was on this day in the year 1956, that LIC of India came into being with the government of India nationalizing the life insurance business through an ordinance on 19^th January 1956.  Ever since 1956, LIC has progressed from strength to strength. In the process, it has fulfilled its objectives and has been immensely contributing to the nation building activities. Today, LIC is an Institution of national importance and operates at a very large scale and efficiency. It has created a significant value for its customers and dominates the life insurance industry in our country. LIC has institutionalized a culture of Trust within its organization which is the basis for its extraordinary success. LIC has grown today to be the premiere public sector financial institution and the pride of India.

LIC has invested Rs. 8,19,835 crores as on 31.3.2012 in central/state government securities, power generation, road transport, water supply, housing and other social activities. LIC has played a very important role in nation building. LIC’s contribution to the Five Year Plans has been commendable. It contributed  Rs. 184 crore to the second Five Year Plan (1956-61), Rs. 3, 94,779  to tenth Five Year Plan (2002-2007) and Rs.7,04,151  Crores to the eleventh Five Year Plan (2007-2012. The most amazing aspect is that around 25% of internal borrowings of the central government are met by LIC every year.  On an initial investment of Rs.5 crores in the year 1956 by the Union Government, it’s share  of the valuation surplus of 5% for the year 2011-12 worked out to be Rs. 1281.23 Crore. With an investment of just Rs.5 crore, till this fiscal year end, the government received a cumulative dividend of Rs. 11,376.10 Crore which is unimaginable in any other institution. The Government of India has entrusted several social security schemes to LIC. Over 1.63 crore landless households under Aam Aadmi Bima Yojana till date are covered by LIC. Taking up the cause of financial inclusion, over 57.76 lac people have been insured under LIC’s Micro insurance schemes. As a part of Corporate Social Responsibility, the ‘Golden Jubilee Foundation’ has been dedicated to the cause of promoting education, health and to provide relief to the people who are poor. So far LIC has sanctioned more than 140 projects worth Rs.18.06 crores, across the country. LIC Golden Jubilee Scholarship Scheme provides scholarship to economically weaker sections of the society to pursue higher education. Every year 1000 deserving students are given scholarship under this scheme dedicated towards nation building; LIC is one of the strongest pillars of India’s social and economic structure.

Ever since the opening up of the insurance sector in the year 2000, LIC is performing marvelously dominating the insurance market. The public sector LIC has surprised the critics with a very strong performance. 

The Compounded Annual Growth Rate (CAGR) of LIC during the last ten years has jumped to 30.24% from 15.23% since inception. LIC’s total policies have risen from 10.12 Croresin to 34 Crores in conventional business along with 10.45  crores of customer base in group business. LIC’s Life fund has grown from 1.54 lakh crore to 12.83  lakh crore. LIC’s asset base has grown from 1.60 lac crore to 14.17 lakh crore by September 2012. The new business premium has gone up from Rs.5930 Crore to Rs. 81515 Crore. Total Premium Income has increased from Rs.27489 Crore to 202802.90 Crore. Thus, through this amazing performance, LIC has retained it’s domination over the market.  It is holding on to a market share of 81 percent in number of policies and 74 percent in new business premium.  The LIC has also an impressive share of 87.4% in the total assets under management. Insurance is a promise which needs to be fulfilled on the happening of an eventuality. LIC settles 99.86% of the claims which is a world record. The track record of the private insurance companies on settlement of claims is abysmally low.  In spite of such a strong performance, it is surprising to note that the rating agencies to facilitate the entry of foreign capital to access the domestic savings of the Indian people, are trying to arm twist by down grading the investment rating of LIC ironically quoting that LIC is exposed to investments in government securities.

The performance of private insurance companies even after a decade of operation is not encouraging. Out of the 23 private insurance companies, 16 have reported operating losses and majority of them are yet to break even. The private insurance companies sell more than 90% of their policies in ULIPs where the returns are dependent on the vagaries of the volatile stock market. According to the government, the public sector LIC has dominated the investment in infrastructure development by accounting for more than 94% where as the private companies are unable to invest for infrastructure development of our country.

In spite of the sterling performance by the Life Insurance Corporation of India, the government, under pressure from the international finance capital, is making attempts to weaken the public sector. The Insurance Laws (amendment) bill 2008 which seeks to increase the FDI cap in insurance from 26% to 49% is a pointer in this direction. More Over, the hurdles created by IRDA with regard to clearing new plans, in recruitment of agents, suspending group superannuation scheme (P&GS) etc are all the hindrances which LIC is able to successfully overcome till now.

However, the most inspiring and enthusing development during the year was that we could successfully defeat the attempts of the government to privatize LIC of India. The LIC Act Amendment Bill (2009) was passed in the Parliament by amending all the sections/clauses which would have been otherwise detrimental to the interests of LIC and its policy holders. The arguments placed by the AIIEA before the standing committee of parliament were upheld. The bill which originally aimed at disinvestment of LIC and removing the sovereign guarantee of government on premiums etc., was subsequently passed in parliament by dropping all these issues. This is one of the most remarkable achievements of AIIEA to protect the interests of LIC, its customers and the nation’s economic sovereignty. 

The insurance employees organized under the banner of AIIEA are committed to strengthen the public sector insurance industry and to the cause of 44 crore policyholders of LIC of India. We shall take a pledge on this momentous occasion to strengthen LIC on all fronts. Let us rededicate ourselves to this humble and noble cause. Our conscious and sustained campaign from the ‘SEATS TO THE STREETS’ alone will help us in achieving the goals.

AIIEA WORKING COMMITTEE MEETING 

AT MYSORE