LIC employees to observe 2-hr walk-out strike on Aug 4

"We are observing a two-hour nation-wide walk-out strike on August 4, opposing the LIC Amendment Bill introduced in the Lok Sabha. Around 70,000 employees from 2,048 centres will go strike," All India Insurance Employees' Association General Secretary, K Venu Gopal said.

The Bill says that the minimum capital of LIC would be increased from the present Rs 5-crore to Rs 100-crore.

"There is no need for this as the Corporation has been doing its expansion from its internal resources for the last 56-years without Government support," Gopal said.

According to IRDA, insurance companies registered after 1999 are expected to have a capital base of Rs 100-crore but since LIC was registered in 1956, it does not require to increase its paid-up capital to Rs 100-crore, he said.

He further alleged that increase in the paid-up capital to Rs 100-crore could be a precursor to disinvestment as Rs 5-crore is a very small amount for disinvestment.

"Today, LIC has Rs 1,17,000-crore excess assets over liabilities and so it does not require any additional capital," Gopal said.

"The intention of the Government is very clear--to privatise the most succesful financial institution," Gopal alleged.

The Bill seeks to provide Government guarantee on policies selectively from time-to-time.
"LIC is capable of meeting all its claims. During natural calamities like the Gujarat earthquake and the tsunami too, it has never taken help from the Government for claim settlement. The Government guarantee was never a burden on the Government," Gopal said.

If sovereign guarantee was withdrawn, the confidence of 26-crore (LIC) policy-holders would be affected, he said.

The Bill also says to change the pattern of valuation surplus distribution.

"Presently, LIC every year pays 95 per cent of the surplus to policy-holders and 5 per cent to the Government. The Bill seeks to change this pattern to 90 per cent for policy-holders and 10 per cent to the Government," Gopal said.

"We object reduction in surplus distribution to policy-holders," he said.