The Dharwad division of the Insurance Employees’ Union has opposed the UPA government’s move to take up discussion and passing two bills pertaining to the insurance sector during the winter session of the Parliament that began on November 17.
Union general secretary B N Poojary, in a release, said, the Insurance Laws (Amendment) Bill 2008 introduced in the Rajya Sabha during December 2008 and the LIC Act (Amendment) Bill 2009, introduced in the Lok Sabha in July 2009 was referred to the standing committee of the Parliament and the government was making all efforts to pass it in the ensuing Winter Session of the Parliament.
“Both bills, to say the least, are retrograde and ill-conceived and are against the interests of policyholders, agents, public sector LIC and general insurance companies. The Insurance Laws (Amendment) Bill 2008 seeks to increase the limit of foreign direct investment in the private insurance companies from the present 26 per cent to 49 per cent, which is nothing more than an attempt to weaken the public sector insurance companies viz., Life Insurance Corporation of India, which has been contributing to the growth of the social sector infrastructure and nation-building activities,” he said.
“Similarly, the bill provides for the nationalised general insurance companies to raise funds from the capital market through the IPO route, thereby leading to privatisation of the public sector general insurance companies,” he added. Further, the bill seeks to make far reaching changes in the rules and regulations pertaining to agents detrimental to the interests of over 3 million insurance agents in the country. The proposed amendment that a policy can be questioned upto five years from the date of issuance of the policy, (presently it is two years) adversely affects the claimants in case of death of the policyholder during that period,” he added.
Poojary further said: “The LIC Act (Amendment) Bill - 2009 seeks, among other things, increase the share capital of LIC to Rs 100 crore or more from the present Rs 5 crores. When the asset base of LIC, which is the biggest financial institution in the country, has crossed Rs 10 lakh crores we do not see any need for increasing the share capital of the LIC. This step should be seen in the context of the decision of the UPA government to disinvest a large chunk of the share capital of profit-making public sector undertakings. The larger share capital base naturally attracts investors and hence, the government is eager to increase the share capital of LIC. The bill also proposes to reduce the share of the policyholders in the surplus generated by LIC from the present 95 per cent to 90 per cent there by damaging the image of the LIC when lesser bonus is announced to policyholders.”
