Life Insurance Employees Demand GST Removal and Cap on FDI

Event: All India Life Insurance Employees’ Federation (AINLIEF) Triennial General Conference
Date: December 02, 2024

Key Demands by AINLIEF

  1. Withdrawal of GST on Insurance Premiums:

Employees are seeking the elimination of Goods and Services Tax (GST) on life insurance premiums to make policies more affordable for customers.

  1. No Increase in FDI Limit:

Opposing the government’s proposal to raise foreign direct investment (FDI) in the insurance sector from 74% to 100%.

Concerns over increased foreign control and potential risks to the domestic insurance industry.

  1. Reintroduction of Old Pension Scheme:

Demand for reinstating the old pension scheme for employees recruited after 2010.

Criticism of the new labour codes and their impact on job security and employee benefits.

Campaign Strategy

Nationwide Awareness Campaign:

Planned outreach to Members of Parliament (MPs) across all political parties to garner support for their demands.

Mobilization of Employees:

The federation aims to unify employees across the sector in a concerted effort to press for these changes.

Context

Current FDI Limit: 74% in the insurance sector, raised from 49% in 2021.

GST on Insurance Premiums: Viewed as a financial burden on policyholders, potentially deterring insurance uptake.

Labour Codes and Pension Scheme: The shift to new labour laws and pension systems has been contentious, particularly among government and public sector employees.

Potential Impact of Demands

  1. On Policyholders:

Removing GST could reduce the cost of life insurance, making it more accessible.

  1. On the Insurance Sector:

Retaining FDI at 74% may maintain a balance between domestic and foreign influence in the industry.

  1. On Employees:

Reverting to the old pension scheme could improve financial security for employees in their post-retirement years.

Conclusion

The federation’s campaign underscores significant concerns about the direction of policies in the life insurance sector. If successful, these changes could lead to increased affordability for policyholders, greater employee satisfaction, and a more balanced approach to foreign investments in the sector.

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