In the wake of stiff competition from foreign and private insurance companies in the country, the modified service conditions for about 12,000 development officers (DOs) working with its subsidiaries were justified in the changing circumstances, the General Insurance Company (GIC) has told the Supreme Court. | |
| Filing a reply to the special leave petition (SLP) before a bench headed by Justice Arijit Pasayat, GIC said: ''Insurance companies are entitled to set their own house in order when global competition in the field of insurance business has grown immensely after the entry of foreign and private insurance companies.'' |
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| Justifying the notification by the ministry of finance and the ministry of company affairs on January 2, 2003, the manager (legal) of Oriental Insurance Company said the modified service conditions for DOs was introduced to reduce cost and enhance efficiency in the marketing field. |
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| The matter will come up for hearing on October 16, the next hearing date. The GIC, which was nationalised in 1972, has Oriental Insurance Company, New India Assurance Company, National Insurance Company and United India Insurance Company as its subsidiaries. |
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| The General Insurance Development Officers' Association (GIDOA), in a petition, said the notification of the government was discriminatory as it had given three choices to the DOs to accept - special voluntary retirement scheme, option for an administrative post as DO (Administration) or DO with changed terms and norms. |
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| In the modified scheme, DOs were denied further promotions, less emoluments and stiff service conditions, said the petition filed in the apex court. |
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| A DO had to procure a minimum of Rs 30 lakh of premium to protect his increment and job. If he did not fulfill the criteria, the target in three years, the officer was removed from his job, alleged GIDOA. |
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| According to the petition, in the name of restructuring, the committee formed by the General Insurance Public Sector Association member companies had submitted a faulty proposal with distorted facts and data to the Centre for amending the scheme for DOs. |
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| The notification of the government was challenged by GIDOA and other officers associations in the high courts of Orissa, Andhra Pradesh, Allahabad, Assam, Punjab and Haryana, Rajasthan, and Nagpur bench of Bombay High Court in 2003. |
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| According to the petition, various high courts had directed the government and GIC to maintain status quo in relation to the service conditions of DOs. |
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