The State government has prepared the ground divest 14 % of its stake in the General Insurance Corporation of India (GIC) and the employees should launch a struggle against it, All India Insurance Employeesâ€™ Association (AIIEA) president Amanullah Khan has said.
Participating as the chief guest at the inaugural of the three-day 17th triennial conference of the General Insurance Employees Association (South Zone) here on Sunday, Mr. Khan said the governmentâ€™s decision to allow Foreign Direct Investment (FDI) in the insurance sector could hit the public sector general insurance companies badly. This was because the insurance brokers would prefer to sell more of private sector products due to inducements by the latter.
â€œThe private sector would pump more funds while the government has no funds to invest. Foreign investors would invest huge funds and indulge in aggressive marketing throwing an uneven challenge to the public sector general insurance companies. They would only foray into areas such as air ticket insurance, air ticket cancellation insurance, where the risk is minimal,â€ he observed.
Mr. Khan further said that LIC was continuously posting growth despite competition from private players due to the introduction of innovative products and advised the GIC to launch innovative products. He also flayed the â€˜double standardsâ€™ of the Insurance Regulatory Development Authority (IRDA), saying that it was playing the â€˜regulatorâ€™ in the case of public sector insurance firms while failing to control the â€˜unethicalâ€™ practices of private insurance companies such as offering inducements to insurance buyers.
GIC South Zone president Shashi hoisted the flag to mark the inauguration of the meet.
CITU leader Ch. Narasinga Rao spoke about the struggles made in Visakhapatnam for protecting the Visakhapatnam Steel Plant (VSP) and the Dredging Corporation of India (DCI) from being privatised. AIIEA general secretary V. Ramesh, GIC leader Prakash Rao and others were present.