The General Insurance Business (Nationalization) Act has been incorporated on 20th September 1972. This Act has been established to provide for acquisition and transfer of shares of Indian Insurance Companies and undertakings to serve for better economy by securing the development of general insurance business by proper regulations and control over such business. Fifty five Indian Insurance Companies and fifty two other general insurance operations of other Companies were nationalized through this Act.
On the day of enactment of this Act all shares in the capital of all insurance Companies in pursuance to this Act shall get transferred and vested in Central Government. Immediately after the transfer, it provides such person not more than ten shares of each insurance company to the name specified in the Official Gazette by the Central Government. This is to enable the Insurance Companies to work as a Government Companies.
The Central Government holding the vested properties and rights shall transfer the undertakings of the existing insurer who is not an Indian insurance Company to the Indian insurance Companies as notified in the Official Gazette. This transfer includes all the assets and liabilities of such Companies, including all the material particulars of such Companies, etc. In case of any liabilities or any issues arises from the date of transfer, Indian insurance Companies shall be responsible unless it is specified anything in the notifications in the Official Gazette by the Central Government. Even in case of any Suit or Appeal or any other legal proceedings initiated on such Company, Indian insurance Company shall handle that in good faith.
In case of any question arises with regard to any particulars with our general insurance Companies or such other Companies, the Central Government is responsible to answer it after reasonable opportunities of being heard have been given to such person who are interested in such matter and will decide accordingly in pursuance to this Act.
In case of matters with regard to employees of the previous insurance Company shall occupy the same position and payment in the Indian insurance Company as it deem fit unless his position has been terminated by them or his remuneration is been altered. Any question with regard to this is also answered by the Central Government after giving reasonable opportunity to hear.
The General Insurance Corporation (GIC) was incorporated in pursuance to this Act under the Companies Act, 1956 as a Private Company limited by shares. This GIC was established to control and operate the General Insurance Business in India. This GIC is the only re-insurance Company having four decades of experience in the Indian insurance markets. The Government of India transferred all the assets and operations of the nationalized general insurance Companies to GIC and public-sector insurance Companies. This Corporat
The Central Government shall pay for transfer and vested shares or undertakings by Indian insurance Companies from other existing insurance Company as per schedule B and to the Central Government to vest shares and rights will get payment as per schedule A listed under this Act. This disbursement of amount by corporation is based on the requirements prescribed under this Act and in a way it is prescribed to carry on any part of general insurance business by assisting the acquiring Companies through framing proper regulations in general insurance business. After paying all the required payment if there remains any profit, the Central Government shall distribute the profit among the acquired Companies.
The Central Government shall formulate any number of schemes or regulations in pursuance to this Act as and when it is necessary. Acquiring Companies shall submit periodical accounts statements that are properly audited by Auditor-General of India and Comptroller. This statements shall intern submit before the Parliaments. This Act also contains several miscellaneous provisions with schedules attached in pursuance to this Act. This Act also got amended this Act and Insurance Act of 1938. This Act has been later amended in the year 2002. The Act along with the amendments ended the monopoly of GIC and its subsidiaries and liberalized the insurance business in India.
by C.Srivenkatesh Prabhu