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Polity & Governance
Mahesh

03/08/21 01:00 AM IST

General Insurance Business (Nationalisation) Amendment Bill, 2021

In News 

  • Lok Sabha passed the General Insurance Business (Nationalisation) Amendment Bill, 2021. 

Key Provisions of the Bill:
  • It seeks to remove the mandatory requirement of the Central government holding not less than 51% of the equity capital in a specified insurer.
  • It defines general insurance business as fire, marine or miscellaneous insurance business.
  • It excludes capital redemption and annuity from certain businesses from the definition.
  • It empowers the central government to notify the terms and conditions of service of employees of the specified insurers.
  • It provides that schemes formulated by the central government in this regard will be deemed to have been adopted by the insurer.
  • It specifies that a director of a specified insurer, who is not a whole-time director, will be held liable only for certain acts which includes the acts which have been committed.
  • It will enhance insurance penetration and social protection to better secure the interests of policyholders and contribute to faster growth of the economy.
Concerns 
  • It will affect the insurance sector in the country and the workers engaged with the General Insurance Company.
  • It may lead to total privatisation of general insurance companies. Privatising would lead to opening a Pandora’s Box, throwing into insecurity 30 crore policyholders.
Source- PRS 
  • The government will also lose money by way of dividend in the proportion of shares being offered.

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