Unions in PSU general insurance sector to strike work on Wednesday

The Joint Forum of Trade Unions in the four public sector general insurance companies have decided to strike work on Wednesday protesting against the Central government's move to privatise one of the insurers.

The Lok Sabha on Tuesday passed the The General Insurance Business (Nationalisation) Amendment Bill, 2021.

The four PSU non-life insurers are: National Insurance Company Ltd, The New India Assurance Company Ltd (already listed), The Oriental Insurance Company Ltd and United India Insurance Company Ltd.

Finance Minister Nirmala Sitharaman had earlier said one of the unlisted non-life insurers will be privatised.

According to the Joint Forum the amendment is not only contrary to the spirit of nationalisation of general insurance industry but also against the assurances made by the present government about strengthening of PSU general insurers, job security/benefit protection to their workforce.

The unions said the amendment paves the way for selling out one of the insurers and the writing is on the wall for others as well.

The unions have decided to go on a one day strike on Wednesday across the country.

As to the objects of the amendment the government had said: (i) to omit the provision to section 10B of the Act so as to remove the requirement that the Central government holds not less than 51 per cent. of the equity capital in a specified insurer;

(ii) to insert a new section 24B providing for cessation of application of the Act to such specified insurer on and from the date on which the Central government ceases to have control over it; and

(iii) to insert a new section 31A providing for liability of a director of specified insurer, who is not a whole-time director, in respect of such acts of omission or commission of the specified insurer which has been committed with his knowledge and with his consent.

On Friday, Sitharaman said the private general insurers have greater penetration and raised more money from the market and therefore give a better premium for public and innovative covers. On the other hand, the government insurers are not able to perform as they are short of resources.