Bill to raise capital of LIC to Rs 100 crore introduced in LS
December, 23rd 2008
The government today introduced a bill to raise the minimum capital of the state-owned Life Insurance Corporation (LIC) to Rs 100
crore amid din and protest in the Lok Sabha.
The Life Insurance Corporation (Amendment) Bill was introduced as the BJP members gathered in the well of the House to demand resignation of Minority Affairs Minister A R Antulay over his remarks on the circumstances of the killing of former Maharashtra ATS chief Hemant Karkare.
The Left parties opposed the introduction of the bill and demanded voting. They claimed the legislation was aimed at privatising the insurance sector.
The bill was introduced after the Left parties lost by 39 to 106 votes, as per the provisional figures.
The bill, which was introduced by Minister of State for Finance P K Bansal, seeks to raise the capital of LIC from Rs 5 crore to Rs 100 crore to place the state-owned company at par with the private sector insurance companies which are required to have a minimum capital of Rs 100 crore.
The bill also empowers the government to further raise the capital of the LIC as required.
Under the Insurance Regulatory and Development Authority (IRDA) norms, all insurance companies, whether in life or non-life sector, are required to have a minimum capital of Rs 100 crore.
The bill also empowers the government to transfer more than 90 per cent of the surplus funds of the LIC to a separate account to be maintained by the LIC.
The amount, said the statement of objects and reasons, will be required to be "utilised for such purpose as the central government may determine, and the reminder as dividend."