Parliament clears long pending Insurance Bill
Parliament on Thursday approved
the NDA government's first major economic reform measure as the long pending Insurance
bill providing for raising foreign investment cap to 49 per cent in insurance
was passed by Rajya Sabha after main opposition Congress and some other parties
came on board.
The controversial Insurance Laws
(Amendment) Bill, 2015, which replaced an ordinance promulgated in December
last, was passed by voice vote after walkout by Trinamool Congress and DMK.
The smooth sailing of the bill in
the Upper House, where the ruling NDA is in a minority, was possible with the help
of opposition parties like Congress, AIADMK, NCP and BJD besides allies Shiv
Sena and Akali Dal.
The bill was introduced this
evening after a heated debate and adjournments over technicalities as a similar
legislation was pending in the House.
The original bill, which was
brought by Congress in 2008, was withdrawn and the new bill was passed after a
debate of about two and a half hours.
Trinamool Congress and Left
parties strongly opposed the measure. While Trinamool, DMK as also SP, BSP and
JD(U) staged a walkout, Left members moved amendments which were negated.
The bill, which was passed by Lok
Sabha on March 4, provides for raising the foreign investment cap in insurance sector
from 26 per cent 49 per cent and is expected to bring in funds to the thousands
of crores.
The bill was introduced after
Deputy Chairman P J Kurien ruled that the new legislation, as passed by the Lok
Sabha, could be taken up as it was a "unique and unprecedented"
situation.
Moving the bill for consideration
and passage, Minister of State for Finance Jayant Sinha said the measure was necessary
for expanding the penetration of insurance in the country which is very low at
present.
He said the measure would help go
beyond life insurance to cover other aspects of like health and crop besides providing
more funds for development of infrastructure.
Seeking to allay apprehensions,
Sinha said the premium will not flow out of the country but will remain within
the country and the interests of policy holders will be protected by the IRDA.
The bill provides for
imprisonment of up to 10 years for selling policies without registration with
the regulator IRDA.
The legislation will also allow
PSU general insurers to raise funds from the capital market and provides for
increased penalty to deter multilevel marketing of insurance products.
He said more and more FDI is
required in the sector to provide more coverage to people of India.
Sinha also sought to allay
apprehensions that state run LIC would be hurt if foreign companies come in,
saying it was a very competitive body and match global players.
At the same time, he said the
country needs not one, but five to 10 LICs. (PTI Business Today)
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