New Delhi: The Union government on Friday moved a bill in parliament to raise the capital base of state-run Life Insurance Corp and enable it to pay up to 10% dividend to the government.
The LIC (amendment) Bill, introduced by finance minister Pranab Mukherjee in the lower house of parliament, proposes to raise the paid-up capital of the insurer to Rs100 crore or more from the present Rs50 million.
The bill also said the insurer could get sovereign guarantee for its products to the extent needed.
LIC can allocate 90% or more of its surplus to policy holders or keep it in a separate account, it said, adding the remaining could be paid to the government as dividend.
Earlier, minister of state for finance Namo Narain Meena said the total premium income of market leader LIC grew 4.45% to Rs1.56 trillion in FY09, lower than the 17.19% expansion seen in 2007-08.
The overall premium income of all the life insurers stood at Rs2.24 trillion at the end of FY09, compared with Rs2.01 trillion in the previous year, he added.