Life Insurance Corporation

The Life Insurance Corporation (Amendment) Bill, 2011

Mr. Deputy Chairman, Sir, I rise to speak on the LIC (Amendment) Bill, 2011. I really do not understand this move. Sir, LIC is a very old and giant organization operating for the past 55 years in this country, and, has been functioning very efficiently and serving the nation. Increasing the Paid-Up Capital from Rs. 5 crore to Rs. 100 crore has no relevance because, at present, it is hundred per cent owned by the Government of India, unless the Government is trying to privatize even the LIC or something like that. Sir, I just read a set of rules, and, I don’t think that it is necessary to have this increase. However, too much of interference by the regulatory agencies is making a lot of sectors inefficient day by day.

Moreover, there is no accountability of the regulatory agencies as to what they are doing and why they are impeding the growth in various sectors. At the same time, reducing policy holders’ dividend from 95 per cent to 90 per cent is nothing but making the public sector undertaking more inefficient and less attractive. We have already seen how the Air India, a public sector undertaking, was made an inefficient organization, whereby the private sector gained the benefits. The 
LIC, I am afraid, is going on the similar lines. I don’t see any reason as to why the Government should interfere whereas in the free and liberalization environment, more delegation and empowerment is required to run organizations more efficiently.

There is one more issue. If every policy holder has been expecting to get about 95 per cent of the premium, which they have paid and the benefits or profits, and, you suddenly reduce it by five per cent and take that five per cent into Government fold, it has no meaning. It should be left to the various organizations, particularly, the LIC, being a giant organization, which has proven its efficiency for the past fifty-five years, to run on their own, based on market forces, so that everything takes place according to demand and supply, and, also as per the market forces. It is placing all the conditions like not to have Divisional Law Officers, not to have agents, not to recruit people, and, such other things. Post-nationalization, the RBI has been controlling the public sector banks, whereby a lot of banks went into loss-making. If we start controlling the LIC also, we may fall into similar lines. Therefore, I propose that some of the amendments have to be changed, and, I suggest that this Bill may be withdrawn. Thank you.