GS Paper - 3 (Economy)

A bill to allow privatisation of state-run general insurance companies got parliamentary assent amid vociferous protest by opposition parties. The General Insurance Business (Nationalisation) Amendment Bill, 2021 was passed by the Lok Sabha on 2 August 2021.

What

  1. According to the statement of objects and reasons of the general insurance amendment bill, 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.
  2. To provide for greater private participation in the public sector insurance companies, enhance insurance penetration and social protection, 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.
  3. 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.

Flashback

  1. 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.