<b>XIII LOK SABHA DEBATES, <i> Session II (Winter Session) </i> </b>
XIII LOK SABHA DEBATES, Session II (Winter Session) Tuesday, November 30, 1999/Agrahayana 9, 1921 (Saka )


Type of Debate: GOVERNMENT BILL
Title: The Insurance Regulatory and Development Authority Bill, 1999 (Not concluded).

TEXT :
1716 hours

THE MINISTER OF FINANCE (SHRI YASHWANT SINHA): Sir, I beg to move:

"That the Bill to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalisation) Act, 1972, be taken into consideration."

Sir, as you are aware, in my Budget Speech of 1998-99, I had proposed the opening up of the insurance sector to competition from private sector Indian companies in order to provide better insurance coverage to our citizens and also to augment the flow of long-term resources for financing infrastructure. The Insurance Regulatory and Development Authority was also to be converted into a statutory body. Accordingly, the Insurance Regulatory Authority Bill, 1998 was introduced in the Lok Sabha on 15.12.1998. The Bill was referred to the Standing Committee on Finance on 4.1.1999 for examination and report.

MR. DEPUTY-SPEAKER: Hon. Minister, please wait for a minute. As the House is aware, no panel of Chairman has been constituted. So, with the permission of the House, I would request Shri Basu Deb Acharia to come and occupy the Chair.

SEVERAL HON. MEMBERS: Yes.

1717hrs. (Shri Basu Deb Acharia - in the Chair)

SHRI YASHWANT SINHA: Mr. Chairman, Sir, as I was submitting before you, the Bill was referred to the Standing Committee on Finance on 4.1.1999 for examination and report. The recommendations of the Standing Committee have been accepted by the Government. This is one instance where all the recommendations of the Standing Committee have been accepted by the Government.

SHRI RUPCHAND PAL (HOOGLY): Have you accepted the Dissent Note also?

SHRI YASHWANT SINHA: The Dissent Notes are Dissent Notes. They are not part of the report. The amendments to the IRA Bill, 1998 were introduced in the Lok Sabha on 18 March, 1999.

However, the Bill could not be taken up for consideration consequent on the dissolution of the Lok Sabha. The Insurance Regulatory and Development Authority Bill, 1999 which is before the House incorporates the provisions of the IRA Bill, 1998 along with the recommendations of the Standing Committee on Finance as accepted by the Government.

I commend the Bill for the consideration of the House.

(ends)

MR. CHAIRMAN : Motion moved:

"That the Bill to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalisation) Act, 1972, be taken into consideration."

There are some amendments to the motion for consideration. Shrimati Geeta Mukherjee.

SHRI AJOY CHAKRABORTY (BASIRHAT): I beg to move:

"That the Bill be circulated for the purpose of eliciting opinion thereon by the 6th March, 2000." (1)

MR. CHAIRMAN : Amendments Nos. 3 and 4 are in my name. I am moving them as a Member and not as Chairman.

I beg to move:

"That the Bill be circulated for the purpose of eliciting opinion thereon by the 7th March, 2000." (3)

"That the Bill to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalisation) Act, 1972, be referred to a Joint Committee of the House consisting of 15 members, 10 from this House, namely:-

(1) Shri Samar Chowdhury

(2) Shri Moinul Hassan

(3) Shri Bir Singh Mahto

(4) Shri Sanat Kumar Mandal

(5) Shri Hannan Mollah

(6) Smt. Geeta Mukherjee

(7) Shri Rupchand Pal

(8) Prof. R.R. Pramanik

(9) Shri Yashwant Sinha

(10) Shri Basudeb Acharia

and 5 from Rajya Sabha;

that in order to constitute a sitting of the Joint Committee the quorum shall be one-third of the total number of members of the Joint Committee;

that the Committee shall make a report to this House by the last day of the Monsoon Session;

that in other respects the Rules of Procedure of this House relating to Parliamentary Committees shall apply with such variations and modifications as the Speaker may make; and

that this House do recommend to Rajya Sabha that Rajya Sabha do join the said Joint Committee and communicate to this House the names of 5 members to be appointed by Rajya Sabha to the Joint Committee." (4)

SHRI RUPCHAND PAL (HOOGLY): I beg to move:

"That the Bill to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalisation) Act, 1972, be referred to a Joint Committee of the House consisting of 15 members, 10 from this House, namely:-

(1) Shri Basudeb Acharia

(2) Shri Moinul Hassan

(3) Smt. Geeta Mukherjee

(4) Shri Sanat Kumar Mandal

(5) Shri Amar Roy Pradhan

(6) Shri P.H. Pandian

(7) Shri Yashwant Sinha

(8) Shri Raghuvansh Prasad Singh

(9) Shri Mulayam Singh Yadav

(10) Shri Rupchand Pal

and 5 from Rajya Sabha;

that in order to constitute a sitting of the Joint Committee the quorum shall be one-third of the total number of members of the Joint Committee;

that the Committee shall make a report to this House by the last day of the Budget Session;

that in other respects the Rules of Procedure of this House relating to Parliamentary Committees shall apply with such variations and modifications as the Speaker may make; and

that this House do recommend to Rajya Sabha that Rajya Sabha do join the said Joint Committee and communicate to this House the names of 5 members to be appointed by Rajya Sabha to the Joint Committee." (14) SHRI PRAKASH PARANJPE (THANE): I have also given some amendments to the Bill.

MR. CHAIRMAN: You can move them when the clause by clause consideration of the Bill is taken up.

SHRI VARKALA RADHAKRISHNAN (CHIRAYINKIL): I have also given notice for an amendment to the Bill for eliciting public opinion.

MR. CHAIRMAN: Not now.

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Vɤ x EM E] |<] E] E ʱɪ +{x E Vɺɨ BS.b.B.. ]< E V |<] E] E E x, {ɽ xx<Vb E 11 V 2 V iE +{x i l + n E< +n ɽ Sɱ Vi l i = iɪ Vi l E E=] n Mɪ Ex +V {ʮʺli ɽ M< E E+{ɮ] E] + +xE |<] E] E E 24 P] E E Mɪ * + xɴɮ + ʴɴɮ EM b Mɪ * ɦ xxɱ<Vb E 24 P] + xɴɮ il ʴɴɮ E +{x * B.].Bx.B. ֨< E =nɽh nM E Vɤ iE B.].Bx.B. E ɨx E{]Ҷx xɽ l, n Pɮ E E nںɮ Pɮ E ]ҡx E ʤɱ E {] xɽ +, VɤE ɽ ʤɱ B.].Bx.B. x V xɽ l, i <x E] E n Vi l * n { ɮx i 10-15 E] nڮ VE Vxɱ ] b{E] ʤɱ E { ɮx i l* + ʺli E ? Z Mi E +V <ƶƺ E] E ʺli , +{E VxEɮ +ɶSɪ M E-

The total per capita savings ratio is the highest in the world. In 1950, our rate of total income savings was 10.4 per cent.

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Savings rate is the highest in the world but in the insurance sector, India's share in the world insurance market is just 0.34 per cent in 1997-98. It is just .34 per cent.

+Mɮ = {ɮ E{] E nʹ] nJ Vɪ i-

in India, insurance spending per capita is worth 7.6 dollars while in the developed countries like in Switzerland, it is 4289 dollars, in Japan, it is 3900 dollars and in UK, it is 2451 dollars per capita.

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nںɮ Eɮh ɽ E <ƶƺ E] V ڱ ɪn , =ɨ ʺɡ +ɨ M E ɱ ʺEʮ] nx * <E l l ]] ɱ ʺEʮ] |<b Ei ɨɪ V ʴM ,

savings reinvestment is a major factor.

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={vI ɽn, V <ƶƺ E{xɪ , V ɮx E{xV , =E ɮ n i>M, {ɽ <bx E{xW E ɮ i>M* ɮ {ɺ BE{ɪ]b E] V.+<.. Vɺx 130 b] ]<{ + {ʱɺW |bں E Ex Eɱ 30 |bE] E] + {ɪ * B E ? +Mɮ 130 |bE] x E n +ɨ M E ɱڨ xɽ M i =E E ɪn ? Vɺ |Eɮ x {U ɱ BE x< {ʱɺ xEɱ, V |vxɨj +] ʤɽɮ V{ x ʽ+ E ʱɪ xEɱ l*

Ex ɱ ɮ VxEɮ E +xֺɮ =E E]M `E xɽ E {B, ɱ + ʽ iE xɽ {ɽS {B* < nʹ] Z Mi E +<.+ɮ.B. E ʤɱ V ɪ Mɪ =E Mi Ex SʽB* nںɮ i ɽ E x E E :

"What is the role of Insurance Companies? The Insurance Companies are like banks or the repository of the public savings. Their credibility and safety is, at all times, far more vital than that of, say, manufacturing companies. It is, therefore, only to meet that the regulator should be particularly concerned about the quality of the management of these companies."

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pa 26

{ɮ] E E{ M< M< , =E ɮ Sxi Ei Ex Sɽi * ɽ i +SU E

Let us go for privatisation, liberalisation and Indianisation first and then internationalisation.

ɮ n E E{xW Iɨi , V x =nɽh n E BS.b.B.. E ɱb E ʺ] E + +ʮEx BE| E E l E{] E { * Vɤ n < |Eɮ E <b]W + xVɨ] ={ɱɤv i =xE {ɽ E nx SʽB* <ɨ V 26 {ɮ] E E{ M< M< , =E Mi Ei Ex =E l l ʴii j V E vx +Eʹi Ex SɽM E =x ɽ vx Jx SʽB E 26 {ɮ] E E{ Mi ɨɪ V =xx E E <bx bʺ]E E{xW +BM, =E {ɺ 74 {ɮ] ɮ E{] ]E M, Ex =ɨ lc + EʮʡEx < Ex E +ɴɶEi E V x E{xW M, ɽ i 26 {ɮ] +Eɪɮ EM Ex x E{xW x c {x {ɮ Bx..B.. |ɴ E * x <ƺ]]ڶx x, x S+ bW x c {x {ɮ E{] E] S+ bW + U]-U] <bx E{xW |ɴ E * <bx ɤbɮ ʺɺ] Eƺx , <bx E{xW 10-15-20 {ɮ] ]E +Eɪɮ E * xɽ Vxi, Ex BE E Ei E M< E V <bx E{xW , bʺ]E E{xW , =ɨ x E{xW <xbɪɮE] ] ]E +Eɪɮ EM, <]] +Eɪɮ EM i =E ɮ lc EʮʡEx < Ex E +ɴɶEi * V Ex n Mɪ , =ɨ ʺɡ ɽ ʱJ 26%,

but there is no clarification.

S+ bW E {ɺ ɽi { ={ɱɤv i <xɴ]] E ʱB* ɽ +Mɮ < |Eɮ E <xɶx E{xW ]E +Eɪɮ EM i BE =nɽh nx SɽM E Exɮ < xɨ E V E{x , =E Sҡ BEWE] +ʡɮ x <xxɪɱ BE| E ʱB <] n* ɽ <] U{ * =xɺ {U Mɪ E <b V<] xSɮ EE l EM i =xx E E xSʮx E E l* Exɮ < + xSʮx E V<] xSɮ EM Vɺɨ x E{x E ɮ 26 {ɮ] M + =E 74 {ɮ] M* nںɮ ɴɱ {U Mɪ E

whether he is having any plan to acquire any stake in the Centurion Bank. The reply is quite indicative. He said: "not now." What does that mean?

= |Eɮ BE nںɮ E{x -- ɱ <xx E{x + * =xx BE <xɣɺ]ESɮ WM E{x E l V<] xSɮ ְ Ex E bEɮx E * MɦM 16 < |Eɮ E x E{xW x +ɮb <bx E{xW E l B.+.. <x E ʱɪ * ɨ x E x E{xV <b +x E iɮ xɽ *

This is a policy.

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