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Insurance Bill introduced in LS

Our Bureau

NEW DELHI, Aug. 16

THE Government today introduced the Insurance (Amendment) Bill, 2001, in the Lok Sabha seeking to allow the entry of cooperatives and intermediaries into the insurance sector.

The introduction of the Bill, however, met with stiff resistance from the Left parties. Opposing its introduction, the CPM member, Mr Basudev Acharya, said that introduction of brokers into the insurance sector would lead to a situation like the stock ma rket where brokers have often been caught in the midst of wrongdoings.

Mr Acharya's views were supported by other Left members including Mr Roop Chand Pal and Mr Radhakrishnan.

However, intervening briefly, the Finance Minister, Mr Yashwant Sinha, said that the Bill would only facilitate the entry of cooperatives and that the introduction of intermediaries such as brokers would lead to a greater choice for the insurance consume rs.

At present, the Insurance Act, 1938, allows for only Indian insurance companies registered under the Companies Act, 1956 to transact insurance business in India after registration with the Insurance Regulatory and Development Authority (IRDA). However, t he Government had received several representation to allow cooperatives to enter the insurance companies.

The Government feels that the entry of cooperatives in the insurance sector would increase the insurance coverage, especially in the rural areas.

The Bill also contains provisions relating to payment of commission and fees to intermediaries and allows flexibility in the eligibility qualifications for corporate agents.

It also seeks to allow for a more flexible mode of payment of premium through credit cards, smart cards and through the Internet.