In a move
to bring state-owned insurer at par with private players in the sector,
Parliament on December 14, 2011 passed the bill for increasing paid-up capital
of the Life Insurance Corporation of India (LIC).
The billed passed proposed increasing the paid-up capital of the LIC to Rs 100 crore from the present level of Rs 5 crore.
Additionally, the new law would provide sharing of 90 percent of LIC surplus with the policy-holders from 95 percent earlier. The reduction in the amount is done in a bid to align the LIC with 23 private players in the sector.
“Funds reserved will be used for expansion of insurance purpose and solvency, etc,” said Minister of State for Finance Namo Narain Meena.
Meanwhile, clarifying the new law further, Finance Minister, Pranab Mukherjee said that LIC would continue to make rules as per the guidelines of the Insurance Regulatory and Development Authority (IRDA) and enjoy the same powers.
However, in the debate to approve this LIC bill, a concern was raised by Prakash Javdekar (BJP) that reducing the surplus will impact the competitiveness of the LIC. The debate eventually gave tough time to the government which lacked the majority.
The billed passed proposed increasing the paid-up capital of the LIC to Rs 100 crore from the present level of Rs 5 crore.
Additionally, the new law would provide sharing of 90 percent of LIC surplus with the policy-holders from 95 percent earlier. The reduction in the amount is done in a bid to align the LIC with 23 private players in the sector.
“Funds reserved will be used for expansion of insurance purpose and solvency, etc,” said Minister of State for Finance Namo Narain Meena.
Meanwhile, clarifying the new law further, Finance Minister, Pranab Mukherjee said that LIC would continue to make rules as per the guidelines of the Insurance Regulatory and Development Authority (IRDA) and enjoy the same powers.
However, in the debate to approve this LIC bill, a concern was raised by Prakash Javdekar (BJP) that reducing the surplus will impact the competitiveness of the LIC. The debate eventually gave tough time to the government which lacked the majority.
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