The Insurance Employees’ Union has opposed the move to increase FDI in insurance sector.
Addressing presspersons here on Friday, U. Gurudath, General Secretary, Insurance Employees’ Union, Udupi Division, said that the All-India Insurance Employees Association (AIIEA) is opposing the Insurance Laws (Amendment) Bill 2008.
The Bill seeks to increase the FDI (foreign direct investment) limit in insurance sector from 26 per cent to 49 per cent. (Insurance Employees’ Union is affiliated to AIIEA.)
He said that FDI increase will allow the foreign capital greater access and control over the domestic savings. This is not in the national interest, he said.
The amount of FDI that has come in insurance sector as equity capital is around Rs 6,700 crore. It was hoped that foreign partners will bring a substantial portion of their global premium into Indian infrastructure. There is no evidence to suggest that this has happened, he said.
Stating that India has done much better than the US and other developed nations in insurance sector, Gurudath said it is because of the potential for profits foreign capital wants to come to India.
There is no justification for the privatisation of general insurance companies. These companies do not have any need for additional capital for expansion. These companies have assets of over Rs 1 lakh crore and reserves of over Rs 30,000 crore, he said.
If the Government goes ahead to enact the Insurance Laws Bill, the insurance employees will go on a nationwide strike the immediate next day of the passage of the Bill.
Added to this, the AIIEA would support the nationwide strike called by central trade unions on February 20-21, he added.
Raghavendra Rao, office-bearer of Insurance Employees’ Union, was present on the occasion.