NEW DELHI, DEC 10: Instead, the government would go in for an ordinance to amend the Acts immediately after the winter session is over and both the Houses are prorogued by the President, official sources said on Sunday.The Insurance Regulatory and Development Authority (IRDA) had set October 16 as the deadline for amending these two laws to delink the General Insurance Corporation (GIC) from its four subsidiaries - New India Assurance, Oriental Insurance, National Insurance and United Insurance.Following the ordinance, the GIC would ceased to be a holding company and it would become a re-insurer. Its four subsidiaries would concentrate on general insurance and compete with private sector companies in the field.The amendments would also do away with the dominant position of GIC and ensure a level playing field in the market for the private operators and the four separated subsidiaries.The equity capital of GIC would be increased to Rs 200 crore, and that of the four separated companies to Rs 100 crore each. With this stipulation, these five insurance companies in the public sector would mobilise more resources, and with the attendant autonomy, earn more for the development of the nation.The Finance Ministry had last month written to GIC and its subsidiaries that they should be prepared for functioning independently, though the legislative process may take time.It also asked them to take independent decisions on matters of personnel, investment and re-insurance of the business undertaken by them.With this, all the three private companies which had been given in-principle approval on October 23 have been accorded full registration, IRDA member H Ansari told UNI.The other two - ICICI Prudential and Max-New York Life - had secured licenses earlier.Ansari said the IRDA was at present processing six applications filed with it, seeking registration. These are from Tata AIG (two applications, one each for life and non-life), Birla Sunlife, Kotak-Old Mutual, Reliance Life (all for life) and from Bajaj (general insurance).IRDA had ended state monopoly of the insurance sector on October 23, issuing registration to three private companies - Reliance General Insurance Company, HDFC-Standard Life Insurance Company and Royal-Sundaram Insurance, under Section 3 of the Insurance Act of 1938.Earlier this year, the government had set up the IRDA by amending Section 13 of the LIC Act, and Section 24 of the General Insurance Business (nationalisation) Act 1972, to permit the entry of private Indian companies in the insurance sector.However, no foreign company can participate in the insurance business with 100 per cent equity. They can only have collaboration with Indian companies.
