Miscellaneous - This Day That Age   

dated January 21, 1956: Take-over of life insurance

The Government of India have decided to nationalise life insurance in the country. As a first step the President has promulgated an Ordinance bringing under Government management all life insurance companies. The Ordinance provides for compensation to shareholders on an equitable basis, reflecting the allocations to shareholders in the past for the period during which management is vested in Government. The Union Finance Minister, Mr. C.D. Deshmukh, said in a broadcast on January 19 that Government proposed to place before the next session of Parliament a Bill in this connection. The Life Insurance (Emergency Provisions) Ordinance, 1956, promulgated on January 19, vests in the Central Government with immediate effect the management of life insurance business. For purposes of this Ordinance, capital redemption business and annuity and certain businesses which are akin to it are deemed to be life insurance business. In the case of insurers carrying on only life insurance business, the entire management of the insurer vests in Government. Where the insurer carries on other classes of business in addition to life insurance, the management of only the life insurance business vests in Government. The provisions of the Ordinance apply also to the foreign business of Indian insurers and the business in India of foreign insurers. General insurance business will be unaffected and will continue to be managed as at present. The Ordinance envisages the appointment as soon as practicable of Government's nominees to manage the business of insurers that has vested in Government. Pending the appointment of these persons, who will be termed custodians, the existing managements would continue but as agents of Government.

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