SLIC Chairman underlines need for national social insurance scheme

Sep 30 - Oct 06, 2002

There is a need for a national social insurance scheme in the country.This was stated by the Chairman of the State Life Insurance Corporation (SLIC) of Pakistan, Samee-ul-Hasan, in an interview.

"We do not have a national social insurance scheme. There is a need for this", he remarked.It is on the part of the government to formulate such a scheme, SLIC chief added.

"As of today, the Pakistani is on his own unless he is working for some organisation which provides these benefits but the average Pakistani is on his own", he said.

Hasan was of the view that the life insurance has a very powerful impact on the national economy as it provides security and there are many cases where life insurance really bailed out families.

He stated that life insurance also has a tremendous impact on social fabric of the society. It makes the society more cohesive and it prevents widows and orphans from being destitute.

The SLIC chief said there are many instances that the life insurance really bailed out families. When bread winner dies family has no resources and it is the life insurance which comes to their rescue.

Hasan pointed out that even today we have a family income benefit scheme and there are thousands of Pakistani families, seven to eight thousands, who are getting a regular monthly cheque from State Life because their bread winner had bought a policy and now that family is sustained by the regular income they are getting apart from the lump sum which was paid. This insurance also generates funds.

He said that the State Life fund is approximately between Rs.75 billion to Rs.80 billion and this money is invested in Pakistan either in government securities. It goes into government cash flows. This money is a saving.

Hasan was of the view that we as a nation need to raise our level of domestic savings which at present is quite low. Because it is savings that raise money for infrastructure, industralisation and all the other needs of the society.

To a question, he said that at present the SLIC has a wide range of products which are selling pretty well.

These were endowment insurance with profits, shadabad, jeevan saathi, child's policy, which cater to the peoples needs, and there is a big market for these.

Hasan said that SLIC now intends to introduce a product for the pension market.

The SLIC chief said that we have an actuarial evaluation process and for the year 2000 our actuator surplus was Rs.401 crores and 97.5% of it is legally distributed to the policy holders by way of bonus. And 2.5 per cent goes to the government as a share holder.

He was of the view that the corporation was financially a very sound organisation.

Hasan further pointed out that at SLIC restructuring has been taken up.

He said that the previous field structure of the Corporation was devised in 1974 and was made effective from January 01, 1975 and that some features of that structure required modifications as with the passage of time they became out of date.

From January 01 this year a new structure was introduced at the SLIC which, the SLIC chief, maintained was done after a long process of discussions with the representatives of field workers.

Hasan maintained that the new structure has produced results beyond expectations and the new business in the first seven months for this year was 37.69 per cent more than the first year premium income of the first seven months of 2001.

He said in year 2000 SLIC carried out a long range study and the Board of Directors fixed employees strength according to the needs of the corporation.

A voluntary retirement scheme was then introduced for the surplus staff and the number that we wanted were more or less accepted in the package and some 1,300 employees opted for this which was about 22 per cent of the total strength.

SLIC chief said that we wanted to bring down the total strength to 4,050 all over Pakistan and this has been achieved.