Demonstrations opposing move of GoI to disinvest 14.22% of shares of GIC Re through IPO

Ludhiana, October 11, 2017: As a part of nationwide protest, demonstrations were organised during lunch hour infront of all the offices of the LIC under Ludhiana Division opposing the move of the Government of India to disinvest 14.22% of shares of General Insurance Corporation of India (GIC Re) through IPO (Initial Public Offer) which aimed to earn around Rs.11, 000 cores to its exchequer.

Addressing the gathering Sh Amarjit Singh, Divisional Secretary, Sh P.P Singh Divisional President and Sh Maan Singh, Divisional joint Secretary apprised that In 1971, the then Govt has Nationalized 107 Private Companies through an Ordinance on 13.05.1971 with GIC of India as holding company and four General Insurance companies viz. National, New India, Oriental and United India as subsidiaries. At that time, the Govt has invested just Rs.19.5 crore only. In 1999, the BJP led NDA Govt has allowed Private Companies in insurance business by amending the Act. The GIC of India which was a holding company till then has become a reinsurance company named as GIC-Re.

The Public Sector GIC Re, earned a profit of Rs. 3, 121.37 Cr during FY 2016-17 and paid a Dividend of Rs. 1002 Cr to the Govt of India. The asset value of GIC- Re as at 31.03.2017 is Rs. 94,913.80 Cr and investments in various Central Govt welfare schemes is Rs. 64,744.92 Cr till 31.03.2017. At the closure of FY 2016-17, GIC Re has Rs.18015.77 Cr as Reserves and Surplus with a healthy Solvency Margin of 2.4%. GIC Re is not only earning profit every year but also paying Dividends to Govt of India. For the Year 2014-15 Rs.540 Cr, 2015-16 Rs.860 Cr and 2016-17 Rs.1002 Cr was paid as Dividend to the Govt of India which vouches its excellent performance and commitment.

The Public Sector GIC-Re is providing reinsurance coverage to all the insurance companies in India. GIC Re is compensating the losses of insurance companies which occurred due to Natural Calamities and various other reasons and by this act the losses of the common public is well protected. GIC-Re by providing reinsurance cover to the insurance companies ensures that the Companies are not facing the danger of closure due to catastrophic losses. Out of the 50 major reinsurance companies in the world in the year 2016, GIC Re occupied 12th position.

Even though the GIC Re does not require any financial assistance or further Capital infusion, the Govt has decided to sell 14.22% of its shares to private players in the name of Public Issue. The BJP led Govt has also decided to go for disinvestment in all the four Public Sector General Insurance Cos.

The only beneficiaries are going to be the foreign private reinsurance players. It will pave the way to corporates and multinationals to take away part of the profits of GIC Re. After disinvestment, the GIC Re will have the interference of Foreign and Indian corporates in its business activities. Not only this, the investments in Govt schemes for the welfare of public will be hampered, the leaders said.