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Sinha tables insurance bill in Lok Sabha; employees to protest

Derivatives and Securities Appellate Tribunal Bills

Amidst procedural wrangles lasting over more than one hour, Finance Minister Yashwant Sinha introduced the Insurance Regulatory and Development Authority Bill 1999 in the Lok Sabha today.

The bill provides for the establishment of an authority to protect the interests of holders of insurance policies, to regulate, promote and insure orderly growth of the insurance industry and amend the Insurance Act,1938, the Life Insurance Corporation of India Act 1956 and the General Insurance Business (Nationalisation) Act 1972.

Non-Congress opposition stage walkout

Despite stiff opposition and a walkout by non-Congress opposition, Sinha introduced the bill and asserted that the General Insurance Corporation of India and the Life Insurance Corporation would not be privatised.

Replying to the objections raised by various members for more than an hour, the minister said only 26 per cent shareholding would be given to foreign companies. The GIC and LIC would continue as Indian public sector companies and there was no question of transferring their assets to anyone, he said.

He said the present bill is not a sudden development and recalled that when the United Front government brought the bill, the Left parties who were supporting that government did not raise any objection. The BJP's objection to the bill at that time was because there were many points left unclarified, he said in reply to Somnath Chatterjee's statement that the BJP also opposed the bill earlier.

Sinha said the government has accepted the recommendations of the standing committee on finance, which studied the bill. The present bill is only a follow up of that bill, he said.

The minister refuted charges that the bill is anti-national and unconstitutional.

Earlier, Somnath Chatterjee (CPM), Indrajit Gupta (CPI), Mulayam Singh Yadav (SP), Raghuvansh Prasad Singh (RJD) and a large number of non-Congress opposition parties strongly opposed the bill saying that the government was mortgaging the sovereignty of the country and selling successful insurance sector to the multinationals.

When the minister introduced the bill ignoring their objection, the entire non-Congress opposition walked out of the house in protest.

Salient features of the bill

The bill empowers the Centre to make rules to provide, inter alia (meaning among other things), for the salary and allowances payable to and other terms and conditions of service of the chairperson and other members, the additional powers and functions that may be performed by the authority, the form of annual statements of accounts to be prepared by the authority, the form and manner and the time within which returns and statements and particulars are to be prepared and furnished by the Centre, the matters on which the insurance advisory committee shall advise the authority, and any other matter which is required to be, or may be, prescribed, or in respect of which provision is to be or may be made by rules.

Clause 30 of the bill proposes to amend the Insurance Act 1938 which inter alia, empowers the authority to make regulations in respect of matters relalting to the registration of insurers under Section 3 the manner of suspension or cancellation of registration under sub-section (5E) of Section 3 determination fees, not exceeding Rs 5,000 for issue of a duplicate certificate for registration divesting excess share capital.

It also provides for fixation of fee for issue of licence to an intermediary or an insurance intermediary and fees to be determined for renewal of licence of insurance intermediaries and period of specifying the requisite qualifications, code of conduct and practical training of intermediafries or insurance insurance intermediaries.

And matters relating to redressal of grievances of policy-holders to protect their interest and to regulate, promote and ensure orderly growth of insurance industry.

The financial memorandum says that the Centre would set up an independent statutory Insurance Regulatory and Development Authority. Recurring expenditure towards salary and allowances of chairperson and other members of the authority will be Rs 6.2 million per year and the officers and employees of the authority Rs 16 million per annum.

Other recurring expenditure by way of rent, maintenance, training, will be Rs 20 million per year. Non-recurring expenditure will be approximately Rs 85.5 million.

Insurance employees to go on strike

The introduction of the bill in the Lok Sabha sparked angry reactions from insurance employees. Over 200,000 employees of the Life Insurance Corporation of India and General Insurance Corporation of India will strike work on October 29.

In fact, groups of employees of the state-owned insurance companies staged a demonstration in New Delhi and other parts of the country against the move.

''We are not against setting up of a regulatory authority but are totally against privatisation of the sector,'' All-India LIC Employees Federation joint secretary B S Rawat said.

He said unions are demanding a national debate on what benefits the common man would get out of the privatisation of the industry.

''They are harping on infrastructure development through opening up of the insurance sector. LIC and GIC are capable of providing funds for infrastructure development,'' Rawat said. He said LIC has so far provided Rs 1.27 trillion (1 trillion = 1000 billion; 1 billion = 1000 million) for infrastructure development.

Unions joining the strike are : All India LIC Employees Organisation, All India Insurance Employees Association and the General Insurance Employees All India Association.

These unions have appealed to different political parties, including allies of the Bharatiya Janata Party, for support to their cause. Leading trade unions cutting across political affiliations have extended their support to the insurance employees, Rawat said.

UNI

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