Opposing the Union government’s decision to list Life Insurance Corporation of India (LIC) in the stock market through an IPO, the decision to increase FDI limits in the insurance sector from 49% to 74% and privatise one public sector general insurance company, employees and officers of LIC will observe one day nationwide strike on March 18.
According to a press release issued by Krishna Anvatti, Secretary of Federation of LIC Class I Officers’ Association, Dharwad; Laxmikant A. Naik, Secretary National Federation of Insurance Field Workers of India, Dharwad, and Uday Gadagkar General Secretary, Insurance Employees’ Union, Dharwad (AIIEA), the strike has been called by all the unions in the insurance sector. All the Unions in the LIC are opposed to all the three proposals as these are not in the interest of the insurance industry, the Indian economy and the people, they have said in the release.
They have said that there was no justification for the Centre’s move. The LIC was created through an Act of Parliament and was given the task of raising resources for faster industrialization of the country by collecting small savings in the form of premiums while giving utmost security to the policyholders. The LIC had been very successful in meeting these objectives. And disinvestment in LIC being the first step towards privatisation, the IPO violated the very objectives of creation of LIC, they have said.
Weaker sections
The capital invested by the government in LIC in 1956 was a meagre ₹5 crore and it was increased to ₹100 crore in 2011 to meet the regulatory requirements. Beginning to function on a small capital, the LIC had accumulated assets worth to ₹32 lakh crore as on March 31, 2020, they said. “The LIC has given utmost importance to the needs of the weaker sections of the society. It has insured 3.68 crore people under various social security schemes for 2019-20. It holds the distinction for the best claim settlement performance. For 2019-20, it settled 2.16 crore claims for ₹1,59,769 crore. Under social security schemes, it settled 68,352 claims amounting to ₹901.95 crore during the same period”, the release said.
The LIC had been consistently paying high dividends to the government on its paltry investment.
The cumulative dividend paid by LIC since 1956 is over ₹28,000 crore and for 2019-20, it paid dividend amounting to ₹2,698 crore.
The LIC IPO would severely impact the economy and vulnerable sections of Indians and affect the objectives of nationalisation and LIC would have to concentrate on delivering increasing profits to the shareholders. They have said that with IPO, LIC, like the private companies, would have to target big policies which bring greater profits and in the process the small size policies which the poor, vulnerable and lower middle classes purchase would no longer be attractive.The social objective of providing insurance cover to the weaker sections will receive a setback. The aim to expand insurance in the unprofitable rural areas too will suffer. Therefore, disturbing the character of LIC will harm the interests of the national economy and the poorer sections of the Indian population, they have said.Likewise the proposal to increase FDI in insurance sector from 49% to 74% was uncalled for and so also the move to privatise public sector general insurance company, the release said
The union office-bearers have said that Trade Unions had been mobilising public opinion against the decisions of the government and have urged the government to reconsider these decisions in national interests. They had already met over 450 MPs to inform them of the inherent dangers to the national economy and request the people of India to extend solidarity with the LIC employees strike on March 18 and support the campaign against LIC IPO, FDI hike and privatization of general insurance company, the release said.
