LIC (Amendment) Bill 2009 passed in the Lok Sabha

NEW DELHI: One of the key financial bill, Life Insurance Corporation (Amendment) Bill 2009 was passed in the Lok Sabha amongst opposition from key parties and a walk out by the Left parties.

The bill seeks to raise the capital base of the state-owned insurer to Rs 100 crore from 5 crore, bringing it on a par with private insurers, both in life and non-life segments, which are required to have a minimum capital base of 100 crore as per IRDA norms.

Minister of State for Finance Namo Narain Meena said once the bill is enacted, it will not have any effect on the present policy holders.

The bill was introduced in the Lok Sabha in 1999 and referred to the Standing Committee on Finance, which had strongly opposed the provision in the Bill that empowered the government to limit the extent of sovereign guarantee.

The government, Meena clarified, will continue to provide sovereign guarantee to the policies sold by LIC.

The bill also seeks to allow LIC to allocate 90% or more such surplus - excess of assets over liabilities - for life insurance policy-holders and the rest to a separate account maintained by LIC.