WHY IN THE NEWS?
Lok Sabha passed the “General Insurance Business (Nationalisation) Amendment Bill.
Amendments to the bill
This bill was passed in line with the government’s privatization drive. Finance minister Nirmala Sitharaman has announced ambitious privatisation agenda, including two public sector banks and one general insurance company in her budget speech for 2021-2022. Accordingly, among four public sector general insurance companies namely, National Insurance Company Limited, Oriental Insurance Company Limited, New India Assurance Company Limited and United India Insurance Company Limited; the government will dilute its shareholding in one company. The name of the company is yet to be finalised.
General Insurance Business (Nationalisation) Amendment Bill, 2021
This bill was introduced in Lok Sabha on July 30, 2021. It seeks to amend General Insurance Business (Nationalisation) Act, 1972 that was enacted to nationalise all private companies undertaking general insurance business. Bill provides for greater private sector participation in public sector insurance companies that are regulated under the Act of 1972. Bill has removed the government shareholding threshold of 51% in specified insurers. Bill has also changed the definition of general insurance business and transferred the power of appointing the majority of directors of specified insurer & power over its management or policy decision from the government
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