ICEU opposes FDI hike in insurance sector

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Tirupati, Nov 16 (UNI) The Insurance Corporation Employees Union today urged the Union Tourism and Culture Minister Ambika Soni to support its proposed movement against the Union Cabinet decision to introduce two legislations on Foreign Direct Investment (FDI) hike in the insurance sector in the coming parliament session.

In a memorandum submitted to the Minister, the Nellore Division Insurance Employees Union President Y K Krishna Kumar and Secretary K Gopalakrishnaiah said proposal to change the investment norms in insurance sector would jeopardise the safety of the funds of the policy holders.

They alleged that the decision to allow the public sector general insurance companies to approach capital markets was aimed at privatisation of the successful companies.

Referring to a statement of the Union Finance Minister, which said a comprehensive legislation seeking to hike FDI limits from 26 per cent to 49 per cent would be introduced in the Rajya Sabha and a legislation to amend LIC Act, enabling it to raise capital of Rs 100 crore from the present Rs five crore would be introduced in Lok Sabha, they said adding that they were shocked over the Union cabinet's decision.

They further said the impact of the global financial crisis was not severe in India as public sector was more dominant in the Indian banking and insurance sectors.

''We are of the firm opinion that the hike in FDI is not in national interest and would allow the foreign capital to gain greater access and control over the large domestic savings with small investments,'' they added.

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