Strengthen Public Sector Insurance Companies

The General Insurance Employees Association has urged the Centre to take effective steps to strengthen the public sector general insurance companies in the country.In a statement issued here in connection with the General Insurance Companies Nationalisation Day recently, P. Gurusamy, president, Coimbatore Region General Insurance Employees Association, said that of late the government was initiating number of measures to weaken the public sector general insurance companies.

Provisions were made in the recent amendment to the General Insurance Business Nationalisation Act (GIBNA) to disinvest the shares of public sector general insurance companies and GIC Re up to 49% apart from increasing the limit of Foreign Direct Investment. One such provision allows the foreign Re-Insurance companies to open their branch offices in India. Mr. Gurusamy said that the capital invested by the Centre at the time of nationalisation was only Rs. 19.5 crore and the four general insurance companies had paid Rs. 664.53 crore as dividend to the Centre for the year 2014-15 alone.

They were also shouldering the responsibility of employment generation in a big way. They were opening their branches even in tier IV cities to reach out to the rural people. Of the 8,120 offices of the four public sector general insurance companies in the country, 1,455 were situated in tier 4, 5 and 6 cities.The 23 private insurance companies accounted for 1,742 branches across the country, of which 1,706 were situated in tier I cities.Mr. Gurusamy complained that ignoring the positive and pro welfare activities of the public sector, the Centre was pushing forward many reforms to weaken the public sector.He called upon the general public to take the policies from public sector general insurance companies alone and extend a helping hand for strengthening the country’s economy.