The General Insurance Business (Nationalization) Amendment Act was incorporated on 9th February 1985. This is an amendment Act to The General Insurance Business (Nationalization) Act, 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.
General Insurance Company (GIC) has become the only re-insurance Company supporting the Public Company and private general Insurance Companies. When the insurance Companies were suffering by the arrangements made with underwriters, etc, the General Insurance Company, as a re-insurer to protect them against losses. GIC and its subsidiaries have a monopoly in general insurance business until the enactment of Insurance Regulatory Development Authority Act, 1999. This Act also amended this Principal Act and Insurance Act, 1938.
The 1972 Act being a Principal Act, this Act stands as a modifications and amendments of the Act, which made certain insertions, exertions and modifications in the Principal Act. Likewise initially this Act made an insertion and modifications made in Clause “o” of Section 3 of the Principal Act which speaks about the Schemes framed in pursuance to that Act. This Act included the Schemes framed under Section 17A also into the Act. The Principal Act always reminds the same except the modifications that is done through the amendment Acts. Likewise, this Act brings an amendment in Section 16 of the 1972 Act with the insertion of sub-clause “8” of Section 16. This Section 16 (8) of 1972 Act says that with this you can frame any number of schemes in pursuance to the principal Act having retrospective effect from the day of enactment of the 1972 Act.
This Amendment Act added Chapter VA immediately after Chapter V in the principle Act. This Chapter VA deals with the terms and conditions on the service of the Officers and other Employees as regulated by the Central Government as notified in the Official Gazette. The Central Government shall allow framing any number of regulations in pursuance to these provisions from appointment till provident fund, superannuation, etc. These changes in the schemes or amendments made by the Central Government shall be notified in the Official Gazette. These amendments and modifications, regulations etc, shall be made immediately after approval from the House of Parliament. Any provisions or laws made in pursuance to the principal Act shall not be in contrary to any other laws or agreements in force. These provisions shall not be affect any Decree or Order, Judgment of any Court, tribunal or other such authority which has a retrospective effect from the day of incorporation of the Principal Act 1972 as per this Amendment Act, 1985.
This Amendment Act, 1985 should be repealed. Though this Act made several insertions in the Principal Act, 1972 but that was not felt enough, so this principal Act has also been amended in the year 2002. By this amendment in 2002, the GIC has been re-notified as re-insurer but its sovereign role over its subsidiaries has been ended. This amendment delinks its four subsidiaries namely National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited and provide re-insurance business to GIC. The Ownership of its subsidiaries has been transferred to the Government of India.
After these amendments, GIC has extensive operations over the SAARC Countries and such other foreign Countries around the world. GIC has expanded its international operations through several branches in key regions around the world. As of 2012, this GIC has become fifteenth largest re-insurance Company and 5th largest aviation re-insurer in the world. Its overall performance rating has also become excellent by its financial strength. The Law Commission of India also recommended the Central Government to repeal this Act as the purpose of this Act has been served and to insert the suitable saving clause in the repealing Act.
by C.Srivenkatesh Prabhu