New Delhi, Oct 31 (UNI) The Union Cabinet has cleared a Bill to increase the share capital of Life Insurance Corporation (LIC) from Rs 5 crore to Rs 100 crore and a comprehensive insurance amendment Bill to provide for, among other things, an enabling provision to raise the FDI from 26 per cent to 49 per cent in private sector insurance companies.
''The Life Insurance Corporation (Amendment) Bill, 2008 will be introduced in the Lok Sabha, while the Insurance (Amendment) Bill, 2008, calling for amendments to the Insurance Act, 1938, General Insurance Business (Nationalisation) Act, 1972 and Insurance and Development Authority Act, 1999, will be introduced in the Rajya Sabha,'' Finance Minister P Chidambaram said today, briefing reporters on last evening's Cabinet meeting.
He said the Bills would merely be introduced in the current session of Parliament. They most likely would not be passed as they have to go to a committee.
The approvals to the Bills were given on the basis of the recommendations of a group of ministers (GoM), which took into consideration the suggestions made by the K P Narashimhan Committee and the Law Commission.
Mr Chidambaram said the comprehensive amendments to the insurance laws would remove archaic and redundant provisions in the legislations, and incorporate certain provisions to provide Insurance Regulatory and Development Authority with flexibility to discharge its functions effectively and efficiently.
On the enabling provision, he said the private sector insurance companies may increase the FDI from 26 per cent to 49 per cent, if their private partners agreed.
''This provision will not apply to public sector insurance companies,'' the Finance Minister clarified.
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