Centre Need Not Be Majority Shareholder In National Insurance Cos : Parliament Passes Insurance Amendment Bill

The Parliament on Wednesday (August 11) passed the General Insurance Business (Nationalization) Amendment Bill 2021 which removes the condition that the Central Government should hold 51% shareholding in state-owned general insurance companies.

The proviso to Section 10B of the General Insurance Business (Nationalization) Act 1972 requires that the shareholding of the central government in the specified insurance companies must be at least 51%. These companies are General Insurance Corporation of India,  National Insurance Co Ltd,  New India Assurance Co Ltd,  Oriental Insurance Co Ltd, and United India Insurance Co Ltd. The 1972 Act was enacted to nationalize all private companies undertaking general insurance business in India. The amendment bill proposes to omit the proviso to Section 10B.

Also, Section 24B proposed to be added in the 1972 Act provides for cessation of application of the Act to such specified insurer on and from the date on which the Central Government ceases to have control over it.

Further, the new Section 31A states that a director of a specified insurer, who is not a whole-time director, will be held liable only for certain acts.

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