LIC’s unhealthy choice

Life Insurance Corporation invested more than Rs 3,500 crore last year in the tobacco industry 

 
By Sonal Matharu
Last Updated: Saturday 04 July 2015 | 02:50:09 AM

The Life Insurance Corporation (LIC) invested more than Rs 3,500 crore last year in the tobacco industry. 


Figures obtained through Right to Information (RTI) by Voice of Victim, an association of mouth cancer victims, doctors and civil society organisations against the use of tobacco, show that in 2010-11, LIC invested in shares of Indian Tobacco Company Limited (ITC),Vazir Sultan Tobacco (VST) Industries and in debentures of Dharampal Satyapal Ltd, which makes chewable tobacco products.

The Life Insurance Corporation invested more than Rs 3,500 crore last year in the tobacco industry
It also invested huge sums of money is two private tobacco manufacturing companies
While selling health insurance policy, the companies have to enquire if an individual is a smoker or a non-smoker
If the person is a smoker, he or she has to pay a higher premium
 
“On one hand government is spending nearly Rs 30,000 crore on treatment of tobacco-related diseases and on the other hand it is investing Rs 3,500 crore in a leading cigarette manufacturing company,” says 
Bhavna Mukhopadhyay, executive director of Voluntary Health Association of India, a non-profit.

The number of shares held by LIC in ITC jumped from about 522.09 million on March 31, 2010, to 995.89 million on March 31, 2011. It had invested Rs 3,561 crore till April 2011. Also it invested about Rs 15 lakh in VST Industries and Rs 50 crore in Dharampal Satyapal.

While selling health insurance policy, the companies have to enquire if an individual is a smoker or a non-smoker. If the person is a smoker, he or she has to pay a higher premium.

The insurance company may also reject the claims of tobacco users if their disease is related to its chewing. But public health experts allege that the companies usually ignore this question.

“The basic objective of LIC is to provide insurance to the life of an individual, whereas on the other hand it invests, shares profits and partly owns a company that sells deaths in the form of tobacco,” says P C Gupta, director of a Mumbai-based non-profit Healis-Sekhsaria Institute for Public Health.

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Asked if the company charges higher premium from tobacco users, LIC in its RTI reply said, “The adverse health effects of tobacco consumption are dependent on quantity, type of tobacco consumed, duration of consumption and any other associated health condition of the insurance applicant. Depending on these factors, while large numbers of consumers are accepted without any extra premium, some of the applicants may be charged higher premium.”

The company does not have any records of applications of insurance seekers it rejected based on smoking. This information, they said, is available in the form of individual case file and to get that information the company would need to “deploy its resources disproportionately”. “Hence the information is exempt under section 7(9) of the RTI Act, 2005,” the reply adds. 

Article 7(9) of the RTI Act says that the information should be provided in the form in which it is sought unless it would disproportionately divert the resources of the public authority or would be detrimental to the safety or preservation of the record in question.

However, the Central Information Commission (CIC) passed a decision in a case in 2005 where it said, “This provision does not exempt disclosure of information, only adjustment in the form in which it is provided.”

LIC could not be contacted for a response.

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