The Parl on Wed approved a bill for increasing paid-up capital of the Life Insurance Corporation of India, after the govt faced some tense moments in the Rajya Sabha where the UPA does not have a majority.
LIC (Amendment) Bill seeks to bring the state-owned insurer on a par with private players in the sector by increasing the paid-up capital of the LIC to Rs 100 crore from the present level of Rs 5 crore. The Lok Sabha has already passed the bill. Though it was passed in the Rajya Sabha by a voice vote after a brief debate on Wednesday, the House saw a division on an amendment moved by Moinul Hassan and Tapan Kumar Sen (both CPI-M). When Left members pressed for a division, the BJP, which is the second largest party in the House with an effective strength of 241, abstained. Thus, the amendment was negatived. In his reply, Minister of State for Finance Namo Narain Meena sought to dispel apprehensions that the "Government will continue to provide sovereign guarantee to the policies sold by LIC". The new law provides for sharing of 90 percent of LIC surplus with the policy-holders from 95 percent earlier. BSP and Opposition, including the BJP and Left asked tough questions from the minister as to why this amount was being reduced. To this, Meena said the measure is to align the LIC with 23 private players in the sector. He said the funds reserved will be used for "expansion of insurance purpose and solvency, etc". Mukherjee said LIC will continue to make rules as per the guidelines of the Insurance Regulatory and Development Authority (IRDA) and enjoy the same powers. Participating in the debate, Prakash Javdekar (BJP) contended that reducing the surplus will impact the competitiveness of the LIC. "Why do you want to reduce the share of policyholders... You want to end the competitiveness of LIC," he said. He said in its investigations in the 2G spectrum scam, the CBI has said the LIC was asked to invest in realty sector companies such as Unitech, DB Realty and Omaxe, which has caused a loss of Rs 4,000 crore to the corporation. In his reply, the Minister said, "Some investments are under investigation". Tapan Kumar Sen (CPI-M) said companies like LIC have helped in creating resilience to tackle financial crisis as they are the basic foundation of country's financial sector. "Don't disturb the LIC and the financial sector," he said. Naresh Chandra Agrawal (BSP) opposed the bill saying the ministers in the government were racing amongst themselves to bring amendments in the laws and do scams. He sought to know from the Centre that how many of the 21 private insurance companies have invested in the rural sector and whether they have stuck to the promises made by them to the Government. Vikram Verma (BJP) wondered whether the government has any hidden agenda behind the bill. Praveen Rashtrapal (Cong) said the bill should not be deferred like the two bills on Tuesday. "There is no necessity to defer the bill like yesterday. That is not Parliamentary. Let us do some work," he said. (DD-14.12) | 
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