Despite charging one percent premium as Federal Insurance Fees (FIF) since 1989, the government has failed to spend a single penny on the promotion of insurance education in the country.
Ayaz Hussain M Gad, Deputy Managing Director, East West Insurance Corporation Limited, said: "The government levied FIF on insurance policy in 1998-1990 budget and since then the insurance industry has been collecting and depositing the fee in the national exchequer and till date the amount comes to approximately Rs 3.5 billion."
The FIF was collected for creating awareness among people about the importance of insurance, establishing insurance departments in different universities and institutes and setting up insurance colleges in major cities of the country, he said and expressed disappointment that the government had not spent a single penny on these programmes.
Moreover, he said that despite several appeals and recommendations by the insurance industry, the government was unwilling to utilise FIF on education purpose. He said that educating masses would be the only way to end poverty and increase the country's Gross Domestic Product (GDP).
N A Usmani, Secretary General, Insurance Association of Pakistan (IAP), said: "The insurance sector has generated written premium of Rs 167 billion and net premium of Rs 129 billion while it paid Rs 66 billion under claims in 2013." He said that the insurance sector had contributed Rs 15 billion as tax to the national exchequer last year. He maintained that the insurance sector had always worked for the well-being of the masses and it had the potential of becoming the country's biggest industry if the government extended its assistance.
Commenting on the status of the country's insurance industry, Ayaz Hussain said: "Pakistan has a strong insurance infrastructure with Rs 60 billion being the size of general insurance industry while the size of life insurance industry is approximately Rs 90 billion." He further said that many other reinsurance companies were willing to set up their industries in Pakistan.
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