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Bill to set up insurance authority introduced in Lok Sabha

Finance Minister P Chidambaram on Thursday introduced in the Lok Sabha an amended bill to provide for the establishment of an authority to protect the interests of holders of insurance policies and to regulate, promote, and insure orderly growth of the insurance industry.

The Insurance Regulatory Bill, 1996, bill, introduced earlier, was referred to the Standing Committee. The government, after accepting almost all of the committee's suggestions, reintroduced the bill with amendments.

Moving the bill, Chidambaram said the government stood by its commitment to implement the common minimum programme. He said both the General Insurance Company and Life Insurance Corporation of India will continue to be in the public sector and be strengthened.

He said in order to streamline the functioning of the two insurance companies, they have to be given competent boards.

Chidambaram said the government was in the process of turning LIC and GIC into international companies as they have already started functioning in foreign countries, including Mauritius and Bahrain.

According to the financial memorandum, recurring expenditure towards pay and allowances of the chairpersons and other members will be of the order of Rs 5.2 million per annum and the officers and employees of the authority will be of the order of Rs 13.3 million per annum. Other recurring expenditure by way of rent, maintenance, training will be of the order of Rs 18.2 million per annum. Other non-recurring expenditure by way of purchase of accommodation, furniture, office equipment will be approximately of Rs 85.5 million.

Initiating the debate, Thawar Chand Gehlot (BJP) said there was a lot of wasteful expenditure in the insurance companies. He wanted loans at a reduced interest rate to the policy holders.

Sriballab Panigrahi (Congress) said there is an apprehension that setting up of such an authority is a prelude to privatisation of insurance companies. There was an urgent need to expand the insurance sector in the country by bringing crops also under it.

UNI