Bill to amend General Insurance Act introduced in Lok Sabha

New Delhi: A bill to amend the General Insurance Act was introduced in the Lok Sabha on Friday to allow the government to reduce its stake in state-run insurance companies, but Finance Minister Nirmala Sitharaman insisted it would not lead to privatization. .

Introducing the General Insurance Business (Nationalisation) Amendment Bill, 2021, Sitharaman said its passage will help generate necessary resources from the Indian markets so that public sector general insurers can design innovative products.

Several opposition members opposed the introduction of the bill, saying it would attract foreign investors and lead to complete privatization of public sector general insurance companies.

Sitharaman said, ‘The apprehensions mentioned by the members are not true at all. What we are trying to do in this is not privatization. We are bringing some enabling provisions so that the government can bring public, Indian citizens and general public participation in general insurance companies?

As per the Statement of Objects and Reasons for the General Insurance Business (Nationalisation) Amendment Bill, 2021, it seeks to do away with the requirement that the central government holds not less than 51 per cent of the equity capital in a specified insurer.

In order to provide for greater private participation in public sector insurance companies and to increase insurance penetration and social security and to better protect the interests of policyholders and contribute to the rapid growth of the economy, it became necessary to amend certain provisions Is. Work,? According to the bill, which was introduced amid the uproar.

Sitharaman said that public-private partnership in the general insurance industry will help in getting more resources.

Why do we need to raise resources from the market? Our market can make money from retail participants who are Indian citizens. Through this, we can get more funding, bring in better technology communication and also enable faster growth of such general insurance companies. We need money to run them,? He said in the Lok Sabha.

The Minister said that the general insurance companies have more penetration in the private sector, they collect more money from the market and hence pay better premium for public insurance and they also have innovative packages.

?While public general insurance companies are not able to perform as they always lack the resources,? Sitharaman said.

Sitharaman had announced a major privatization agenda in the Budget for 2021-22, which included privatization of two public sector banks and a general insurance company.

We propose to privatize two public sector banks and one general insurance company in the year 2021-22. Will this require legislative amendment?,? He said that.

As of today, there are four general insurance companies in the public sector – National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and United India Insurance Company Limited. Now one of these will be privatized, for which the government is yet to finalize the name.

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