In a memorandum submitted to FM, the Confederation had pointed out that though the gross premium during last five years had almost doubled, leading to the growth of health insurance business in the country, the virtual number of lives covered and number of policies issued remained very meagre

New Delhi: The Confederation of General Insurance Agents’ Associations of India, an umbrella body of non-life insurance agents, has urged Finance Minister Nirmala Sitharaman and GST Council to reduce the existing GST on retail health insurance policies from 18% to 5% so as to encourage larger people to buy these policies as a measure of social security.

A memorandum, demanding the GST rate cut on retail health cover, was submitted to Sitharaman marking a copy to the Prime Minister, chief ministers of all states, UTs, GST Council and the Parliamentary Standing Committee on Finance as well as all stakeholders on Tuesday, said Lokessh K C, convener, Confederation of General Insurance Agents Association of India.

Lokessh is also a member, executive committee, General Insurance Council, the official representative body of all general insurers and reinsurers operating in India.

In the memorandum, the Confederation had pointed out that though the gross premium during last five years had almost doubled, leading to the growth of health insurance business in the country, the virtual number of lives covered and number of policies issued remained very meagre.

Also, though health insurance portfolio in the general insurance industry is currently very significant, but sadly, the renewal rate of the policies is alarmingly declining due to frequent premium hikes and medical inflations, pointed out the memorandum.

Out-of-pocket expenses for health remains at 48.2% in the country thus pushing the poor people to pay a hefty medical bill and leaving the senior citizens who have taken health covers to the pathetic plight of being forced to pay a premium of Rs 12k to 15k per lakh out of their nominal income.

Further, the fact that stagnancy factor in the share of health insurance was restricted only five states in the entire country was also highlighted by the Confederation. Vast areas of the remaining states remain under penetrated pushing the new tax regime aimed at attracting more taxpayers to avail the benefit under Deduction u/s 80D of IT Act to also become redundant.

GST levied on Insurance in the country being highest in the world, needs to be addressed by the government to keep up to the goal of “Insurance for all by 2047” which was endorsed by the standing committee on finance in its 66th Report submitted to both the houses of Parliament on 6th February 2024, recommending rationalising GST on health insurance, said the Confederation.