Centre introduces bill to amend General Insurance Business (Nationalisation) Act, 1972

Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman, on Friday introduced a Bill in the Lok Sabha to bring down a part of centre’s stake in public sector general insurance companies. The Bill will be amending the General Insurance Business (Nationalisation) Act, 1972.

Clarifying about the bill that will be allowing the centre to offload its shareholding below 51 per cent, Sitharaman said that the Bill is not for privatisation.

She said that centre is not initiate privatization through the bill and rather trying to enabling provision so that the government can involve public participation in general insurance companies.

The Bill introduced in Lok Sabha proposes three amendments. The first aims at doing away with the proviso to Section 10B of the Act so as to remove the requirement that the Central government holds not less than 51 per cent of the equity capital in a specified insurer.

The second amendment is inclusion of a new Section 24B, ensuring cessation of application of the Act to such a specified insurer from the date on which the Centre ceases to have control over it.

The third amendment is also inclusion of a new Section 31A, making a director, who is not a whole-time director, liable only for acts of omission or commission committed with his knowledge and connivance by the insurer.

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