INSURANCE
Bill to allow privatisation of state-run general insurance companies gets parliamentary assent
Aug-12-2021

A bill to allow privatisation of state-run general insurance companies got parliamentary assent after Rajya Sabha passed it with a voice vote amid tearing of papers and vociferous protest by opposition parties. The General Insurance Business (Nationalisation) Amendment Bill, 2021 was passed by the Lok Sabha on August 2. The upper house passed the legislation with a voice vote in the din, in a matter of minutes, with Finance Minister Nirmala Sitharaman not replying to points raised by MPs briefly.

The bill was taken in the upper house soon after it passed the Constitutional amendment bill regarding OBC list. The Constitution amendment bill was passed after a nearly five-hour discussion in an amicable settings in the House, which otherwise had witnessed disruptions since the start of the monsoon session on July 19. However, moods changed soon after the passage of the OBC related bill, and Opposition returned to the Well of the House leading to a brief adjournment. The chair was forced to adjourn the proceedings as opposition kept raising slogans and threw papers in the air.

The bill was passed amid the ruckus even as the Finance Minister did not dwell on the bill. According to the statement of objects and reasons of the general insurance amendment bill, it seeks to remove the requirement that the central government should hold not less than 51 per cent of the equity capital in a specified insurer. To provide for greater private participation in the public sector insurance companies, enhance insurance penetration and social protection, 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 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. There are four general insurance companies in the public sector - National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited.

  RELATED NEWS >>