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| LIC employees oppose privatization of UIC | | |  Early Times Report
JAMMU, Aug 4: LIC Employees under the banner of Northern Zone Insurance Employees' Association Srinagar Division as per the call of All India Insurance Employees' Association held massive demonstrations in front of LIC offices of Jammu & Kashmir against Privatization of United Insurance Company.
The Joint Front of Trade Unions in PSGI has given a call for One Day Strike on 4th August 2021 (Wednesday) against the passage of the Bill in the Lok Sabha and we are supporting their cause, said Pawan Gupta. The demonstration in Jammu region was led by Com. Pawan Gupta, Divisional Secretary NZIEA Srinagar Division; and in valley region, was led by Com. A.M.Tantray, Divisional President, and Com. Ajaz Ahmad Dar, Joint Secretary, Fyaz Gul, Vice President, Amarjeet Singh, Syed Aadil Imam, Bashir Ahmad, Abdul Majid Sheikh and Parvaiz Ahmad.
Speaking on the occasion, Com. Pawan Gupta strongly opposed the passage of General Insurance Business (Nationalisation) Amendment Bill 2021 without a debate amid continuing protests by the opposition parties and despite serious objections raised by a wide spectrum of public opinion. The passage of the General Insurance Business (Nationalisation) Amendment Bill 2021 not only carries forward the agenda of the government to privatise one PSGI Company, but it paves the way for privatisation of all the PSGI Companies in one fell swoop.
The Bill proposes three amendments to the GIBNA Act of 1972. Two of the amendments are particularly dangerous for PSGI Companies. Section 10B of the GIBNA 1972 stipulates that the government would hold at least 51% stake in the Public Sector General Insurance Companies. Now this section has been omitted to enable the government to sell majority stakes. This is outright privatization. The second amendment is to insert a new Section 24B. This section states that the GIBNA Act will not be applicable to any company in which the government stakes comes below 51%. This is a clear indication that such company will not be regulated by this Act as the government no longer would enjoy control over such company.
These measures will therefore enable the government to privatise all the four public sector general insurance companies and the reinsurer GIC Re. The argument of the Finance Minister that it is not privatisation but an effort towards greater private participation sounds somewhat ludicrous. It does not require rocket science to understand that dilution of government stake in any company below 51 per cent amounts to privatisation. In justification of her decision, the Finance Minister says that servicing of the private sector insurance companies are much better than that of PSGI Companies. One should not forget in this context that even today the Public Sector General Insurance companies occupy the first five slots in terms of premium and also claims settlement. In the year 2020 and 2021 penalties were imposed against private insurance companies only and the number of grievances registered against private insurance companies was 82% as against 18% against public sector insurance companies.
The public sector general insurance companies are doing yeoman service by opening branches in the tier 4, 5 and tier 6 cities where the population is less than 5000. This is done as per the directives of the government of India. Nearly 40% of the branches are in the tier 3, 4, 5 and 6 cities. Whereas private insurance companies operate only in metro cities and they don't have branches in tier 5 and 6 cities and only 3% in tier 3 and tier 4 cities.
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