CrackitToday App

General Insurance Business (Nationalisation) Amendment Bill, 2021

General Insurance Business (Nationalisation) Amendment Bill, 2021:

The General Insurance Business (Nationalisation) Amendment Bill, 2021, was passed by both the houses of the parliament.

  • It seeks to amend the General Insurance Business (Nationalisation) Act, 1972.

Key Provisions of the Bill:

  • It seeks to remove the mandatory requirement of the Central government holding not less than 51% of the equity capital in a specified insurer.
  • It defines general insurance business as fire, marine or miscellaneous insurance business.
  • It excludes capital redemption and annuity from certain businesses from the definition.
  • Capital redemption insurance involves payment of a sum of money on a specific date by the insurer after the beneficiary pays premiums periodically.
  • Under annuity certain insurance, the insurer pays the beneficiary over a period of time.
  • It will not apply to the specified insurers from the date on which the central government relinquishes control of the insurer. Here control means:
    Power to appoint a majority of directors of a specified insurer.
  • To have power over its management or policy decisions.
  • It empowers the central government to notify the terms and conditions of service of employees of the specified insurers.
  • It provides that schemes formulated by the central government in this regard will be deemed to have been adopted by the insurer.
  • The board of directors of the insurer may change these schemes or frame new policies.
  • Further, powers of the central government under such schemes will be transferred to the board of directors of the insurer.
  • It specifies that a director of a specified insurer, who is not a whole-time director, will be held liable only for certain acts which includes the acts which have been committed:
    • With his knowledge, attributable through board processes.
    • With his consent or connivance or where he had not acted diligently.