Cooperative Life Insurance Company

Why in News?

Recently, the union minister announced the setting up of a cooperative life insurance company during the 5^th Foundation Day (July 6) of the Ministry of Cooperation.

• It is India's 1^st dedicated cooperative life insurance company.
• Aim - To expand the cooperative sector’s presence in financial services and provide affordable coverage and strengthen financial inclusion.
• Objective– It broadens India's cooperative ecosystem beyond dairy, sugar, and fertilisers into transport (Bharat Taxi), insurance, and seed systems.
• Precedent - The proposal builds on the success of IFFCO-Tokio General Insurance, a successful non-life joint venture led by the Indian Farmers Fertiliser Cooperative.

IFFCO (Indian Farmers Fertiliser Cooperative Limited) the insurance sector through a joint venture with a Japanese firm, offering general and life insurance services to cooperative members and rural communities.

• Structure - Capital requirements and regulatory approvals from the IRDAI remain in emerging stages.
• Initial plans suggest existing cooperative societies will serve as initial promoters.
• Target Audience - The insurer will leverage over 8.5 lakh cooperative societies and 30 crore members to increase penetration in underserved and rural areas.
• Utilization - By utilising PACS as Common Service Centres (CSCs), the cooperative life insurance company can bypass expensive urban distribution networks and agent commissions.

PACS (Primary Agricultural Credit Societies)

• PACS – They are local cooperative credit bodies giving short‑ and medium‑term farm loans, forming the last tier of India’s cooperative credit system.
• Digital transformation – Converting them into e‑PACS means full modernization with digital technology and automation.
• Purpose – To boost transparency, efficiency, and professionalism, empowering 30 crore cooperative members nationwide.

Reference

The Hindu | Cooperative Life Insurance