Tuesday, July 26, 2005

Assam: A state fully insured!

Via coffee house, From The Times of India: Assam: A state fully insured!

Not a bad idea at all! ToI says this is "a move to beat all populist moves". The word 'populist' in our parlance only has a negative meaning. I certainly wouldn't consider this move just a vote-catching one. In a country that doesn't have proper social security system, or any other form of Govt. run security system, moves like this would help a long way.

However, I am not clear whether this is a manageable business for the insurance companies. With Rs. 50,000 per accidental death, Rs. 25,000 for any health related "eventuality" (what does eventuality mean? Not death, I suppose?), and the insurance premium of Rs. 25 crores, I do not know how many people will be covered under these eventualities! How many accidental deaths happen in an year in Assam (including terrorist violence between Kukis, Karbis, Bengali Muslims, Bodos, Assamese etc.)? We will probably know how sustainable this operation is for the insurance company.

what would it cost Tamil Nadu with a population twice that of Assam and less violence-prone? Double the premium as above? Rs. 50 crores? I think it would be worth it for the Govt. to do so.

It would be worthwhile if someone can post more details on the exact insurance coverage and other caveats.

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