In a significant move benefiting thousands of insurance sector employees, the Central Government has formally approved comprehensive wage and pension revisions for Public Sector General Insurance Companies (PSGICs). The revision, effective from August 1, 2022, introduces new pay scales, enhanced allowances, and increased NPS contributions, marking one of the most substantial salary overhauls in the sector in recent years.
Insurance Salary Increase 2026
The Insurance Salary Revision 2026 represents a substantial 12.41% increase in the wage bill for public sector general insurance companies, with the NPS contribution hike from 10% to 14% being a game-changer for long-term retirement security. The retrospective implementation from August 1, 2022, ensures employees receive substantial arrears, while the new 18th Schedule pay scales bring insurance sector salaries closer to banking sector standards.
Insurance Salary Increase 2026: New Pay Scales & NPS Benefits: Notice
Covered Organizations
The wage revision applies to all Public Sector General Insurance Companies (PSGICs), including:
- National Insurance Company Ltd (NICL)
- New India Assurance Company Ltd (NIACL)
- Oriental Insurance Company Ltd (OICL)
- United India Insurance Company Ltd (UIICL)
- General Insurance Corporation of India (GIC)
- Agriculture Insurance Company of India Ltd (AICIL)
New Pay Scales: 18th Schedule (Officers)
The introduction of the “Eighteenth Schedule” with significantly revised pay scales for officers across seven levels:
| Scale | Revised Pay Scale (Basic Pay) |
| Scale I | ₹82,485 – ₹1,56,745 |
| Scale II | ₹1,10,835 – ₹1,65,525 |
| Scale III | ₹1,35,135 – ₹1,88,665 |
| Scale IV | ₹1,65,525 – ₹2,17,590 |
| Scale V | ₹2,00,235 – ₹2,56,680 |
| Scale VI | ₹2,24,105 – ₹2,78,145 |
| Scale VII | ₹2,51,125 – ₹3,12,655 |
Enhanced NPS Benefits
One of the most significant changes is the enhancement of NPS contribution:
Previous NPS Contribution:
- Employee contribution: 10% of Basic Pay + DA
- Employer contribution: 10% of Basic Pay + DA
Revised NPS Contribution (Effective August 1, 2022)
- Employee contribution: 10% of Basic Pay + DA (Unchanged)
- Employer contribution: 14% of Basic Pay + DA (Increased from 10%)
Supervisory, Clerical & Subordinate Staff (12th Schedule)
The Fourth Rationalised Pay Scales introduce substantial increases:
| Post | Revised Pay Scale |
| Senior Assistant/Stenographer | ₹50,815 – ₹1,26,125 |
| Assistant, Typist, Telephone Operator, etc. | ₹36,290 – ₹1,00,865 |
| Record Clerk | ₹33,670 – ₹90,570 |
| Driver | ₹33,670 – ₹78,060 |
| Other Subordinate Staff | ₹29,320 – ₹67,095 |
Revised Allowances Structure
1. House Rent Allowance (HRA) – Effective August 1, 2022
| Category | Rate | Maximum |
| Metro Cities (Mumbai, Delhi, Chennai, Kolkata, etc.) | 10% of Pay | ₹13,000/month |
| Cities >12 lakh population (excluding metros) | 8% of Pay | ₹11,000/month |
| All other places | 7% of Pay | ₹10,500/month |
2. City Compensatory Allowance (CCA)
| Category | Rate | Maximum |
| Metro Cities | 3% of Pay | ₹3,300/month |
| A Class Cities (>12 lakh pop.) | 2.5% of Pay | ₹3,100/month |
| B Class Cities (5-12 lakh pop.) | 2% of Pay | ₹2,400/month |
| C Class Cities | Nil | – |
Hill Station Allowance
| Category | Rate | Maximum |
| ≥1,500 meters | 2.5% of Basic Pay | ₹2,055/month |
| 1,000-1,500 meters | 2% of Basic Pay | ₹1,650/month |
| ≥750 meters (surrounded by hills) | 2% of Basic Pay | ₹1,650/month |
4. Fixed Personal Allowance (Reckons as Basic Pay for PF, Pension, Gratuity)
| Scale | Revised Amount |
| Scale VII | ₹8,215 |
| Scale VI | ₹6,755 |
| Scale V | ₹6,515 |
| Scale IV | ₹5,785 |
| Scale III | ₹5,785 |
| Scale II | ₹4,390 |
| Scale I | ₹4,390 |
5. Other Allowances
- Transport Allowance: ₹3,300/month (Effective August 1, 2022)
- Paradeep Port Allowance: ₹440/month (Effective from the month following Gazette publication)
- Kit Allowance: ₹14,800 (One-time on transfer to hill stations)
Dearness Allowance (DA) Calculation
| Component | Details |
| Base Index | 8456 (All India CPI-IW, Base 1960=100) |
| Rate | 0.06% of Basic Pay for every 4 points increase over 8456 |
| Revision Frequency | Quarterly |
| Effective Date | 2nd month after quarter end |
Development Staff Pay Scales (Schedule K)
For Development Officers, new pay scales have been introduced under Schedule K:
| Grade | Revised Pay Scale |
| Development Officer Grade I | ₹58,010 – ₹1,45,150 |
| Development Officer Grade II | ₹39,385 – ₹59,025 |
Technical Qualification Allowances
| Qualification | Monthly Allowance | |
| Insurance Institute of India/CII | Licentiate | ₹915 |
| Associateship | ₹2,485 | |
| Fellowship | ₹4,245 | |
| Institute of Actuaries (per subject) | ₹915 | |
| CA/ICWA | Intermediate | ₹1,780 |
| Final Group A or B | ₹3,045 | |
| Final (Both Groups) | ₹4,245 | |
| MBA (AICTE approved) | ₹4,245 | |
Important Implementation Notes
- Retrospective Effect: The scheme is deemed to have come into force on August 1, 2022
- No Adverse Effect: Certified that no employee will be adversely affected by retrospective implementation
- Exclusions: Employees who resigned or were terminated between August 1, 2022 and the Gazette publication date are not eligible for arrears
- Cost Absorption: Arrears to be absorbed in respective performance year costs, subject to stipulated limits
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