Lok Sabha passes bill to amend public sector general insurance law

New Delhi: Lok Sabha on Monday passed a bill to amend the general insurance law to allow the government to pare its stake in state-owned insurers.

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.

As per the statement of objects and reasons of The General Insurance Business (Nationalisation) Amendment Bill, 2021, 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, to enhance insurance penetration and social protection, to 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 Bill was introduced on Friday by Finance Minister Nirmala Sitharaman.

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.

”We propose to take up the privatisation of two Public Sector Banks and one General Insurance company in the year 2021-22. This would require legislative amendments,” she had said at the time.

As of date, 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.

Now, one of these will be privatised for which the government is yet to finalise the name.