Bill Passed by Lok Shabha

Bill passed by lok shabha

The longas-pending Insurance Bill, a key economic reform legislation providing for raising foreign investment cap to 49 per cent, was today passed by Lok abha with the government insisting that the measure is crucial for e!panding the penetration of insurance in the country" The controversial Insurance Laws #$mendment% Bill, which seeks to replace an ordinance, also provides for imprisonment of up to &' years for selling policies without registration with the regulator I()$" The proposed legislation will also allow *+ general insurers to raise funds from the capital market and provides for increased penalty to deter multilevel marketing of insurance products" The bill, one of the key reform legislations, has been pending since ''" .ustifying the decision to raise the cap from / per cent, 0inister of tate for 1inance .ayant inha said the country needs this as 2our insurance penetration is low3" (esponding to concerns e!pressed by members about the fate of the poor, he said the measure takes care of the interests of even the poor" 2we brought important important safeguards that will protect full interest of people #insured%,3 he said" 1or the poor, the minister said the government is bringing many different policies"

5e said more and more 1)I is re6uired in the sector to provide more coverage to people of India" (esponding to 6uestions posed by members, the 0inister noted that in the banking sector, the 1)I cap was 74 per cent and wondered why it cannot be increased in insurance sector" inha cited the case of 8hina and a number of other countries, saying they allow higher foreign investment in insurance" 2e are well within our global benchmarks,3 he said" 5is reply was marked by a spat after he made certain comments which were strongly ob:ected to by oppostion members" The matter settled only after he e!pressed an apology and said he had not intention to 2disrespect anyone3 but was 2:ust pointing out factual errors3" Though the bill cleared the Lok abha hurdle with ease, the government will face a tough task in getting it passed by the (a:ya abha where it is in minority" The insurance bill, introduced in (a:ya abha in '', is already pending in that 5ouse" hen it was introduced in Lok abha yesterday, Left and T08 members resisted, contending that the 5ouse has no legislative competence as similar bill is pending in the ("  $ bid to withdraw it from the +pper 5ouse last week was scuttled by opposition" The Bill seeks to raise foreign investment limit in the sector from / per cent to 49 per cent" hile up to / per cent will be under the automatic route, the remaining would be cleared through the 1I*B"

2The proposed amendments are aimed at bringing about improvements and revisions in the laws relating to insurance business in India to remove archaic provisions and incorporate modern day practices emerging in a changing dynamic environment, which includes private participation,3 says the tatement of ;b:ects and (easons of the Bill" +nder the new provisions, the Life Insurance 8ouncil and the