MUMBAI, March 1: The ministry of finance has asked Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) to allow policy-holders to pay their premiums through credit cards. The move is a concerted bid to upgrade technology in the insurance industry.Minister of state for finance Satpal Maharaj had convened a high-level meeting of insurance officials of the two monoliths in Mumbai a few days ago. ``We are, at present, examining the whole thing, which involves a bit of a technical problem,'' sources said. They were, however, quick to point out that the two state-run firms had to surmount technical hurdles before they could implement the move.
The centre has not yet brought the credit card under the Negotiable Instruments Act enacted by the British ages ago. As per Section 64 of the 1938 Insurance Act, both LIC and GIC can accept for legal and commercial transactions only those instruments which are enlisted under the Negotiable Instruments Act.
Sources said the centre had to first amendthe act so that the two monoliths could start accepting premium payment through credit cards. ``We are planning to move the law ministry after examining the process,'' sources said.
While LIC is already in talks with banks that provide credit-card services, General Insurance is examining the pros and cons internally before taking a final view on the matter. Both LIC and GIC accept cash and cheque payments towards payment of premium. LIC, meanwhile, is planning to expand its hi-tech metropolitan area network to facilitate premium payment in any branch to almost four to five major cities.
The move will facilitate policy-holders to receive their status reports, loan and revival quotations of their policies without any delay. In 1996-97, total individual new business of the corporation, including overseas business, amounted to Rs 56,993.94 crore (sum assured) under 122.81 lakh policies.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
