Notes

Write a note7 2. Explain the provisions of the General Insurance Business (Nationalisation) Act,1972 (GIBNA).[Learning Outcome b] General InsuranceBusiness(Nationalisation) Act,1972 (GIBNA) The General InsuranceCorporation of India(GIC) was formed as a Government companyunder sub-section (1) of Section 9 ofthe General InsuranceBusiness (Nationalisation) Act, 1972 (GIBNA, 1972) and itcommenced business fromJanuary 1, 1973.The purpose of establishment of GICas a holding companyof the four operating (subsidiary) companies, as stated in the General InsuranceBusiness(Nationalisation) Act, was superintending, controlling and carryingonthe businessof general insurance. Functions of GIC The functions of GIC asenunciated in the saidAct are as follows: a) the carrying on ofany part of generalinsurance businessas deemed desirable; b) aiding, assisting and advising the companies inthe matter of setting up of standards of conduct and sound practice in general insurance businessand in rendering efficientcustomer service;c) advising theacquiring companies in the matter of controlling their expenses including the payment ofcommission and other expenses; d) advising the acquiring companies in the matter of the investment of funds; e) issuing directions toacquiring companies in relation to the conduct ofgeneral insurancebusiness Provisionsof the Act 1. It has alsobeen stated in the General Insurance Business(Nationalisation) ActthatGIC shall keep in mind the desirability of encouraging competition among thesubsidiary companies asfar aspossible in order to make their services more efficient.Though the conceptofholding company in the publicsector was new at thattime,the role assigned to GIC andthe need forcompetition among the four subsidiaries was clearly broughtoutin the Actitself. On the formation of the GIC, the shares of the Indianinsurance companies, which vested in the Central Government,were transferredto theGIC and all the Indianinsurance companies became the subsidiaries of the Corporation. Under the schemes framed under GIBNA,1972, the Indianinsurance companies got merged into oneanother and ult in this area. It's really easy to share with others. Click here ...