Initiating the debate on the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, Manickam Tagore of the Congress said provisions of the bill were unsettling and could lead to people questioning the credibility of the insurance sector.
He said successive Congress governments at the Centre have given priority to "protection over profit”, which the present dispensation was doing away with.
He said nationalisation helped all strata of society feel included.
Countering him, KV Reddy of the BJP, who was the first speaker from the treasury side, said privatisation has helped greater insurance penetration as competition has prompted companies to offer benefits to customers.
He maintained that FDI is not stopping local players in any way.
He opined that now insurance agents can sell policies and schemes of multiple companies as they will not be bound down by working for one player.
At present, Reddy claimed, India has 70-75 lakh insurance agents, and an enhanced FDI will create more jobs in the field.
Noting that while healthcare is cheaper in India compared to other countries, it is still unaffordable, Reddy said that in such a scenario, increased insurance penetration is a must.
Utkarsh Verma of the Samajwadi Party claimed that the draft law was a surrender before corporate interests.
He claimed that in the coming times, foreign players will get full control of the insurance sector, which would harm the interests of people living on the margins.
The MP was of the view that enhanced FDI will eventually lead to spiralling premium rates, depriving the middle class and the poor.
The bill proposes to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
RSP’s NK Premachandran strongly opposed the Bill, stating that through 100% FDI, it would amount to indirectly privatising the LIC altogether.
"This would adversely affect LIC and the livelihood of LIC agents in the country,” he said.
Premchandran also urged the government to protect the public sector undertakings of the country, particularly LIC and other general insurance companies, for the welfare and development of the nation.
K Radhakrishnan of CPI(M) opposed the Bill, saying it is away from social security and towards corporate insurance expansion.
He also urged the government to withdraw the Bill.
Congress’s Muhammed Hamdullah Sayeed claimed that the Bill does not promote and protect the local businesses and entrepreneurs involved in the insurance sector.
He also urged the government to have a relook at this amendment and keep this bill in abeyance. Sayeed asked the government not to give complete control to the foreign investors, thereby protecting the local market and insurance sector.
RJD’s Abhay Kumar Sinha said that this Bill is a move to privatise LIC and said that the Bill should be sent to the Parliamentary Committee.
Also Read: Insurance Amendment Bill aims to accelerate sector growth, protect policyholders, says FM
