Chennai, Dec 6 (IANS): With the government announcing its intention to almost rewrite the insurance laws by proposing far-reaching amendments, the amendment Bill should be first sent to the Standing Committee of Finance in Parliament, demands the General Insurance Employees' All India Association (GIEAIA).
The GIEAIA is the major union in the four government-owned general insurance companies and also is the first one to react to the proposed amendments.
According to the GIEAIA, the proposed amendments to the insurance laws may result in mushrooming of small insurers and the return of the pre-nationalisation era.
The central government has proposed to amend various provisions of the Insurance Act 1938 and the Insurance Regulatory and Development Authority Act 1999.
The amendments proposed are: allowing composite insurer -- one insurer selling life and non-life insurance policies, enabling the insurance regulator to fix the minimum capital required and scrapping the statutory limits, changes in the investment norms, allowing different kinds of insurers including captives and others.
The amendments proposed to the Insurance Act should first be placed before the Standing Committee of Finance in Parliament for thorough discussion before its implementation, demanded Trilok Singh, General Secretary, GIEAIA.
Singh also reiterated the long-standing demand of the unions to merge all the four public sector non-life insurers into one company similar to Life Insurance Corporation of India.
According to the central government, in view of the changing needs of the insurance sector, a comprehensive review of the legislative framework governing the sector has been done in consultation with the Insurance Regulatory and Development Authority of India (IRDAI) and the industry.
"A number of suggestions have been received to enhance the insurance penetration, improve efficiency, and enable product innovation and diversification," the government said.
Officials of the other major union -- All India Insurance Employees' Association (AIIEA) -- were not available for comments despite several attempts by IANS.