Bill for amendment of general insurance law passed in House
Lok Sabha on Monday passed a bill to amend the general insurance law to allow the government to pare its stake in state-owned insurers.
The General Insurance Business (Nationalisation) Amendment Bill, 2021 wants to generate resources from the Indian markets so that public sector general insurers can design innovative products.
As per the statement of objects and reasons of The General Insurance Business (Nationalisation) Amendment Bill, 2021, it seeks to remove the requirement that the central government should hold not less than 51% of the equity capital in a specified insurer.
To provide for greater private participation in the public sector insurance companies, to enhance insurance penetration and social protection, to better secure the interests of policyholders and contribute to faster growth of the economy, it has become necessary to amend certain provisions of the Act, according to the Bill.
The Bill was introduced on Friday by finance minister Nirmala Sitharaman.
The finance minister in the Budget 2021-22 had announced a big-ticket privatisation agenda which included two public sector banks and one general insurance company.
“We propose to take up the privatisation of two Public Sector Banks and one General Insurance firm. This would require legislative amendments,” she had said in the Budget.
West Bengal finance minister Amit Mitra wrote to Union Finance Minister Nirmala Sitharaman, urging her not to go ahead with the privatisation of public insurance companies.
He said the move to privatise has brought a great sense of insecurity and distress among the people of the country. “May I express my shock and alarm at the policy decision of the Government of India venturing to privatise public sector insurance companies which are the pillars of the economy,” Mitra said.
The government plans to privatise public general insurer United India Insurance Company in the first instance as well as sell-off Life Insurance Corporation (LIC).