Govt does not rule out Ordinance for insurance sector reforms

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Government on Tuesday appeared not to rule out the possibility of promulgating an Ordinance on insurance sector reforms.

“We will have to consider all possibilities right now because the fact is that the country needs more investment in the insurance sector,” Minister of State for Finance Jayant Sinha said when asked whether the government would look at the Ordinance route.

He attributed the non-passage of the Bill on the last day of Winter session of Parliament to “political obstructionism”, after opposition Members in Rajya Sabha disrupted proceedings.

The Insurance Laws Amendment Bill 2008, among other things, seek to increase the composite foreign investment limit in insurance companies to 49 percent from current level of 26 per cent.

The 49 percent cap would include both FDI and foreign portfolio investments.

“We need the skills and the expertise that foreign insurance companies do provide. So we have to really think through all the different alternatives. We need to ensure that the product and services (related to insurance) are available to all the people of India,” the Minister told reporters outside Parliament.

Pointing out the government had done everything possible in this regard, Sinha said the select committee, under Chandan Mitra, did a good job.

“It was ready to be passed in the Rajya Sabha this time… But again there was political obstructionism and we were not able to pass the Bill,” Sinha said.

According to him, the Bill is sorely needed to ensure insurance for more people and that there was a need for re-insurance industry to take off in the country.

“All of this is being blocked, because people want to oppose it, because of obstructionism… But people of India look through all of this very very quickly,” the Minister said.