Bill on insurance firms introduced

Context:

Amid the din, the government introduced the General Insurance Business (Nationalisation) Amendment Bill in the Lok Sabha.

Relevance:

Prelims, GS-III: Indian Economy (Growth and Development of Indian Economy, Government Policies and Interventions)

Dimensions of the Article:

1. General Insurance Business (Nationalisation) Amendment Bill

General Insurance Business (Nationalisation) Amendment Bill

• The General Insurance Business (Nationalisation) Amendment Bill will amend the General Insurance Business (Nationalisation) Act, 1972.
• The Bill proposes three amendments:
  1. The first aims to omit the proviso to Section 10B of the Act so as to remove the requirement that the Central government holds not less than 51 per cent of the equity capital in a specified insurer.
  2. The second amendment is to insert a new Section 24B, providing for cessation of application of the Act to such a specified insurer from the date on which the Centre ceases to have control over it.
  3. And, the third amendment is also to insert a new Section 31A, making a director, who is not a whole-time director, liable only for acts of omission or commission committed with his knowledge and connivance by the insurer.
• Although the Bill has a provision that will allow the government to bring down its shareholding below 51 per cent, Sitharaman clarified that this is not a Bill for privatisation.

Opposition to the Bill

Primary opposition to the bill is that it would lead to total privatisation of the general insurance companies.

-Source: The Hindu