General Insurance Business (Nationalisation) Amendment Bill

• It will amend the parent Act, the General Insurance Business (Nationalization) Act, 1972.
• The bill is widely seen as a move to privatize state-run insurance companies and is part of a larger divestment programme of the government, which plans to sell stakes in five state-run corporations
• This will speed up its privatization agenda to draw in foreign investment in a covid-hit economy.

Background of Bill

• The government hopes to achieve its planned divestment target of ₹1.75 trillion for FY22 despite hurdles posed by the coronavirus pandemic.
• A panel headed by the finance minister had cleared disinvestment and stake reduction of the country’s largest insurer Life Insurance Corporation Ltd, the first step toward the finalization of the bill.
• The government also cleared the listing of the insurer on equity markets and initial public offerings (IPO).
• The Finance Minister in the Budget 2021-22 had announced a big-ticket privatisation agenda, including privatisation of two public sector banks and one general insurance company.

General Insurance:

• General insurance covers home, travel, vehicle, and health (non-life assets) from fire, floods, accidents, man-made disasters, and theft. Different types of general insurance include motor insurance, health insurance, travel insurance, and home insurance
• There are four general insurance companies in the public sector -

1. National Insurance Company Limited
2. New India Assurance Company Limited
3. Oriental Insurance Company Limited and
4. United India Insurance Company Limited.

• Now, one of these will be privatised for which the government is yet to finalise the name.