The General Insurance Business (Nationalization) Amendment Act, 2021 privatizes four subsidiary companies of GIC

The Central government through gazette notification dated 19 August, 2021 has published the General Insurance Business (Nationalization) Amendment Act, 2021. The General Insurance Business (Nationalisation) Amendment Act, 2021 seeks to privatize government companies undertaking general insurance business in India. The act provides for the following:

1. Four subsidiary companies of GIC: (i) National Insurance, (ii) New India Assurance, (iii) Oriental Insurance, and (iv) United India Insurance is no longer required to have shareholding of the central government of minimum 5%.
2. The principal act will not apply to the four companies from the date on which the central government relinquishes control of the insurer.  Control means: (i) the power to appoint a majority of directors of a specified insurer, or (ii) to have power over its management or policy decisions.
3. the Board of directors of the four companies may frame terms and conditions of service of employees.
4. The amendment limits the liability of the Board of the four companies.
5. Capital redemption and annuity certain are included within general insurance business.