Lok Sabha passes bill to privatise Insurance Companies

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 percent 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 by Finance Minister Nirmala Sitharaman on Lok Sabha on July 30, 2021. She had also announced in her budget speech that under the Government’s privatisation agenda, two public sector banks and one general insurance company would be taken up.

There are four major State-owned insurance companies in the country namely, National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited.