LIC employees to observe walk-out strike on 4 Aug

LIC employees to observe walk-out strike on 4 Aug

Mumbai: LIC employees plan to observe a two-hour walk-out strike on 4 August to protest against the LIC (Amendment) Bill, 2009, introduced by the finance minister in the Lok Sabha on Friday, a senior office-bearer of an employees association said.

“We are observing a two-hour nation-wide walk-out strike on 4 August, 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 Rs5 crore to Rs100 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 Rs100 crore but since LIC was registered in 1956, it does not require to increase its paid-up capital to Rs100-crore, he said.

He further alleged that increase in the paid-up capital to Rs100 crore could be a precursor to disinvestment as Rs5 crore is a very small amount for disinvestment.

“Today, LIC has Rs1,17,000-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," he 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If sovereign guarantee was withdrawn, the confidence of 26-crore (LIC) policy holders would be affected, he said.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 states changing the pattern of valuation surplus distribution.

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

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