Shimla, May 14 (UNI) The National Zone Insurance Employee Association (NZIEA) today opposed comprehensive legislation on insurance, saying it aims to increase foreign direct investment (FDI) to 49 per cent from the present 24 per cent.
''Besides, increasing the FDI cap to 49 per cent, the legislation will increase the LIC's share capital to Rs 100 crore from Rs five crore and withdraw obligatory placement of reinsurance with GIC,'' association's secretary Anil Bhatnagar said at a press conference here.
He said, Finance Minister P Chidambaram had during his budget speech, earlier this year, promised the introduction of a comprehensive bill on insurance during the current session of the Parliament for reforms in the insurance sector.
The Centre was bringing forward the legislation on the ground that the Insurance Act 1938, LIC Act 1956, GIBNA 1972 and several other insurance laws had become obsolete, he said.
Mr Bhatnagar alleged that instead of simplifying the laws and making them customer friendly, the real aim of the legislation was to lay a roadmap for the privatisation of the LIC and the public sector general insurance companies.
Referring to the recommendations by the Insurance Regulatory and Development Authority (IRDA), Law Commission and K P Narsimhan Committee, he said, they in all were not only laying a road map for further liberalisation of the sector but were for the complete dismantling of the public sector.
While IRDA been suggesting that the issue of FDI should be taken out of the purview of Parliament and the executive should be entrusted with the powers to hike foreign equity limit, the Law Commission was suggesting deletions of certain provisions besides easing of norms for investment of insurance funds, he said.
He said the Narsimhan Committee, on the other hand, had recommended corporatisation of LIC and easing of investment norms, including the option to invest outside the country.
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''Besides, increasing the FDI cap to 49 per cent, the legislation will increase the LIC's share capital to Rs 100 crore from Rs five crore and withdraw obligatory placement of reinsurance with GIC,'' association's secretary Anil Bhatnagar said at a press conference here.
He said, Finance Minister P Chidambaram had during his budget speech, earlier this year, promised the introduction of a comprehensive bill on insurance during the current session of the Parliament for reforms in the insurance sector.
The Centre was bringing forward the legislation on the ground that the Insurance Act 1938, LIC Act 1956, GIBNA 1972 and several other insurance laws had become obsolete, he said.
Mr Bhatnagar alleged that instead of simplifying the laws and making them customer friendly, the real aim of the legislation was to lay a roadmap for the privatisation of the LIC and the public sector general insurance companies.
Referring to the recommendations by the Insurance Regulatory and Development Authority (IRDA), Law Commission and K P Narsimhan Committee, he said, they in all were not only laying a road map for further liberalisation of the sector but were for the complete dismantling of the public sector.
While IRDA been suggesting that the issue of FDI should be taken out of the purview of Parliament and the executive should be entrusted with the powers to hike foreign equity limit, the Law Commission was suggesting deletions of certain provisions besides easing of norms for investment of insurance funds, he said.
He said the Narsimhan Committee, on the other hand, had recommended corporatisation of LIC and easing of investment norms, including the option to invest outside the country.
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