Plea to raise cap on health cover tax benefits
The Hindu - Business Line, 27 February, 2007
Mr Antony Jacob, Managing Director, Royal Sundaram Alliance Insurance Company hopes that the promised comprehensive Insurance Reforms Bill will happen soon.
"Foreign direct investment needs to be increased to 49 per cent. This will allow for capital inflow into the insurance industry and will further enrich it by bringing world-class business practices and processes, help expand distribution capabilities and deepen market penetration. "Importantly, huge capital is required for improving the retention capacities in the country," he said. On the health insurance side, Mr Antony said, "There is need to increase the ceiling for tax benefits under Section 80D for health insurance from the current Rs 10,000 premium. This will encourage more people to buy health insurance, resulting in better market penetration. Similarly, service tax on health insurance need to be exempted."
On rural insurance, Mr Antony said, "The Government should reduce service tax on micro-insurance products. The current service tax of 12.24 per cent, that includes the educational cess, is steep and detrimental to rural insurance growth."
He also pleaded for the extension of subsidy on rural health premium to be made applicable to all insurance players. Currently, under the Universal Health insurance scheme of the Government, this subsidy is available only to PSU insurance companies.