LIC Act amendment Bill 2009 has been introduced in the Rajyasabha.
Government claims that the paid-up capital of LIC is below the minimum capital specified by IRDA and hence in should be increased.
First of all LIC need not be under IRDA norms as it was also formed by a special act, that is LIC Act 1956.
Then strengthening LIC by providing Rs.95 Cr capital is meaningless as LIC has assets worth more than Rs.9 lakh crores. From the inception LIC never asked government a single paise for support. But it pays huge dividend for that Rs.5 Cr. Last year (for 2007-08) LIC paid Rs.830 Crores as dividend. That is 16,600% (Sixteen thousand and six hundred percent) profit!!!!!!
The purpose of the bill is to modify LIC Act 1956 to enable to sell shares of LIC, that is to privatise LIC.
The bill also proposes to reduce the Bonus to the policyholders. Currently LIC distributes 95% of the profits to the policyholders as Bonus. Now Government reduces this Bonus to 90%. Government wants to support the private insurance companies by reducing LIC's Bonus! It will make our policies become less competitive with private players' policies.
Then the bill proposes to modify the Government Guarantee now given to LIC policies! Though there is a Guarantee from the Government, LIC never used it. But removing the Guarantee is also to make our policies less competitive!
So it is not intended to strengthen LIC. It is specially designed to destroy LIC!
Oppose the bill! Fight against it! Join with the LIC employees and approach our 26 cr policyholders and explain them! Create a mass movement!