Prelims: Current events of national and international importance | Economy
Why in News?
Recently, the union minister announced the setting up of a cooperative life insurance company during the 5th Foundation Day (July 6) of the Ministry of Cooperation.
- It is India's 1st 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
