Lok Sabha Passes Bill To Privatise Insurance Companies

The Lok Sabha on Monday passed a legislation which would enable the Government to sell its majority stake in State-owned insurance companies, setting the stage for their privatisation.

Also Read: West Bengal Finance Minister Urges Centre To Desist From Privatising Insurance Firms https://www.ndtv.com/business/west-bengal-finance-minister-urges-centre-not-to-privatise-public-sector-insurance-companies-2500625?pfrom=home-business_topstories

The General Insurance Business (Nationalisation) Amendment Bill, 2021 is aimed at generating required resources from the Indian markets so that public sector general insurers can design innovative products, official sources said.

The bill, which was passed without any discussion in the lower house, has been protested upon by the Opposition and West Bengal Finance Minister Amit Mitra had even written a letter to Union Finance Minister Nirmala Sitharaman, urging her not to privatise public sector insurance companies.

According to the objectives of the 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.

It also calls for greater private participation in the public sector insurance companies, to enhance insurance penetration and social protection, to better secure the interests of policyholders.

Ms Sitharaman had introduced the bill on Lok Sabha on July 30, 2021. She had also announced in her budget speech that under the Government's privatisation agenda, two public sector banks and one general insurance company would be taken up.

There are four major State-owned insurance companies in the country namely, National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited.