Insurance employees flay privatisation

“It appears that the Finance Minister has made a policy statement like his counterparts in the past. Presently, Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) have a complete monopoly in the sector.

The government will have to introduce a bill proposing amendments in the LIC Act and GIC Act to do away with their monopoly. And the government is not likely to introduce the bill in the budget session as it has not been included among the 104 bills slated to be tabled in this session,” he said.He doubted whether the government, with its wafer thin majority, would be able to table the bill in the future as well.

He said that privatisation would lead to a cut-throat competition in the insurance sector. “Such competition will reduce the premium. Private companies charge unviable premium and ultimately the reserves do not build up. That is why we will oppose any attempt of privatisation,” he said.A similar view was expressed by Uday Patwardhan, national general secretary of National Organisation of Insurance Workers (NOIW).

While stating that the efficiency of LIC has been top class, he said, the step to open up the insurance sector was not at all necessary. “Let there be a debate across the country over the issue,” opined Patwardhan.

However, he welcomed what he termed as an “attitudinal change” in the government’s thinking. “Unlike former finance minster P Chidambaram’s statement that the sector would be opened for competition from even multinational companies, Sinha, it appears, has decided to open it for competition only in the domestic context. This is a welcome change in the thinking of the government,” he said. However, that does not mean that LIC should be privatised, he added. Basically LIC is a very competent organisation. However if the clients have some grievances we are ready to redress them, Patwardhan said. “But NOIW will not tolerate any attempt at privatising LIC,” he warned.

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