ISLAMABAD: The State Life Insurance Corporation (SLIC) will be delisted from the privatisation list, as the Ministry of Commerce was not cooperating in completing the pre-requisite actions despite the passage of two and a half years.

This was revealed by Hassan Nasir Jamy, Secretary Privatization Division/Commission, while briefing the Senate Standing Committee on Privatisation, which met under the chairmanship of Senator Shamim Afridi, here Friday.

Member Committee Anwar Lal Din, Anwaarul Haq Kakar, secretary privatisation, chairman SLIC, secretary law and other officials attended the meeting.

“We are moving a summary to the federal cabinet for removing SLIC from the privatisation list,” said secretary privatisation.

He said that about two and a half years ago, SLIC was included in the privatisation list, but could not move forward.

While taking a briefing on the privatisation process and considerations, the secretary privatisation and chairman SLIC informed the committee that in January 2016, the corporatisation strategy (conversion into a public limited company) of SLIC was initiated by the Ministry of Commerce.

Privatisation: SLIC delisting from approved list of entities to be approved today

On April 7, 2016, an ordinance was formally issued to provide for the reorganisation and conversion of SLIC into a public limited company.

The Ordinance was presented in the Parliament as SLIC (Re-Organization and Conversion) Bill 2016 and was passed by the National Assembly.

However, the Senate proposed a few amendments to be incorporated in the bill, which could not be finalized. Presently, the proposed certain amendments, referred the bill to the National Assembly for approval. The bill is pending before the National Assembly, however, the Ordinance2016 has lapsed.

On May 13, 2016, a company in the name of State Life Insurance Company Limited was incorporated in the SECP to facilitate transfer of assets and liabilities etc from corporation to company.

Due to non-approval of the bill the company is non-functional.

The committee was further informed that an ordinance needs to issue to initiate the privatisation process, because the nationalised status of SLIC was established under the LINO, which is protected under the Constitution.

Secretary Privatisation said that the Privatisation Commission approached the Ministry of Commerce multiple times to complete the pre-requisite actions regarding, “Corporatization of SLIC” through the legislative process to enable PC to proceed further, however, despite repeated follow-ups, no progress has been achieved so far

The Secretary Ministry said that directions should be given for expediting the long-awaited corporatisation process of SLIC.

The chair with the consensus of the committee members sought a briefing from the Ministry of Commerce on the assumed blockades by the ministry on the privatisation process and also summoned the Ministry of Law and Justice to brief on the matter of legislation.

The chairman SLIC said it was formed in 1972 by merging 36 companies.

He informed the committee that the SLIC has more than 5.7 million individual life policyholders entitled to two of the most attractive elements not provided by any other insurer in Pakistan these are presence of government guarantee to policies and surplus distribution at 97.5 percent to its policyholders.

Any change in policyholders’ reasonable expectation may require compensation.

Government guarantee has never been used by the SLIC to meet policyholder commitments, however, it is at times used as a sales tool by the field force, he added.

The new chairman of State Life has said that he will tell how long he will complete the process of corporatisation of State Life and then the process of privatisation will take place.

The chairman SLIC highlighted that the 97.5 percent surplus utilisation of the LINO is allocated for policyholders and 2.5 percent is allocated for federal government and provides an undertaking by the central government with regards to policyholders.

While briefing the committee on the structural overview of the State Life Insurance, the chairman SLI informed the committee that there are seven regional offices, 33 zone offices, 166 sector offices, and 1,242 area offices.

It was also informed that the life, group and health business lines have 2,352 officers, 2,284 staff, 1,243 area managers, and 134,205 field forces.

The chairman Committee sought a report on the number of retired employees and pensioners of the SLIC and those working on extension.

The chairman committee further proposed that instead of reducing the number of regular employees, retired officers and officers re-inducted on extension should be removed.

This will reduce the financial burden of the organisation.

The chairman SLI informed that there are approximately 10-20 employees on extension; however, he was not sure on the definite number and said that he will provide it in the next meeting.

Kakar raised the question of salary or stipend for the field staff, which he termed as the “driving force of the organisation”.

“It is unfortunate to know that the key workers contributing to the salaries of the departments are given no earnings at all,” Kakar observed. “It is a corporal biased and an extremely screwed approach” he added.

Field force belongs to the miserable and lower class of the society and there is no means of income for their survival.

The chairman SLIC informed the committee that 80,000 workers on the field are active workers and are being offered medical and group insurance.

The chairman SLI also said that as per the regulations a permanent employee is deemed as a full employee of the organisation, however, field force employees have no restrictions on part-time working.

He added that the State Life pays the highest commission, medical and group insurances.

Reconsideration of the bill titled, “the Privatization Commission (Amendment) Bill, 2021” moved by the Minister for Privatisation in the Senate sitting held on 23rd June 2021 was deferred.

The Committee expressed deep sorrow and grief over the sad demise of Syed Ali Shah Gillani and offered Fateha for the departed soul.

Copyright Business Recorder, 2021

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