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|December 2, 1999||
Sinha says insurance bill is fool-proof
Finance Minister Yashwant Sinha today allayed fears expressed by some members in the Lok Sabha that there was scope by private companies of breaching the 26 per cent foreign investment cap, fixed under the Insurance Regulatory and Development Authority Bill. He also assured that the interest of existing agents will be protected.
Clarifying a number of queries raised by members, Sinha said adequate safeguards have been taken in the bill and the regulatory authority, which will come into existence after the law is enacted, will also issue guidelines on this issue.
He also denied fears of some members that LIC and GIC employees will lose their jobs. In support of his contention, he said that it is expected that the insurance business by 2002-2003 will rise to 4.5 per cent GDP as against two per cent in 1997-98.
Sinha said that the IRDA is a statutory and strong body and will ensure that the provisions made by the government are not misused by private companies.
In his reply to the debate, Sinha said the issue concerning LIC agents was also discussed by the interim regulatory body, which had alredy decided that the interest of existing 500,000 agents would be fully protected.
Sinha said that all the new private companies had to deposit Rs 100 million with the Reserve Bank of India. ''If required, an Investors Protection Fund could be created at a later stage,'' he said.
The finance minister said that Section 26C of the bill prohibits new private companies from investing their funds abroad.
Sinha said that the suggestion of some members to have discussions with LIC and GIC employees as well as managements to sort out problems is a welcome one and the government will do its best to sort out pending disputes.
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