AIIEA opposes FDI hike in insurance sector

Hyderabad: The All India Insurance Employees' Association (AIIEA) on Tuesday opposed Finance Minister Nirmala Sitharaman's announcements relating to the insurance industry in her Budget speech. The FM in her Budget speech on Monday said that the government would amend the Insurance Act 1938 to increase foreign direct investment (FDI) in the insurance sector from 49 per cent to 74 per cent and allow foreign ownership in insurance with some safeguards. She has also announced plans to privatise one general insurance company along with two public sector banks, and declared that the government would bring the LIC IPO in this financial year.

"There is absolutely no justification for the FDI hike in the insurance industry. The actual share of FDI in the total investments in the private insurance industry today is much less than the current limit of 49 per cent. FDI hike in insurance would only help foreign capital gain greater control over our precious domestic savings," AIIEA General Secretary, Shreekanth Mishra, said in a statement.

The AIIEA is of the firm opinion that privatisation of any public sector general insurance company is not in the interest of the nation. According to AIIEA, the LIC IPO will certainly be a big blow to the very concept of 'Atmanirvar Bharat' that the government has been constantly emphasising upon. It is an institution which does not create any profit for itself as it distributes the entire surplus generated to the Government and the policyholders.