12th May 1954. Fifty years ago this day is written in Golden letters in the trade union history of General Insurance Employees. On this day the Bombay Insurance Employees Union. A unitary Organisation of insurance employees was born. (GENERAL INSURANCE EMPLOYEES UNION, W.Z.)

It was around 1945 that Unionsation amongst middle-class white-collar workers took roots. Employees were knitted into an Organisation according to circumstances and convenience. Insurance companies were transacting Life and General Insurance business as such was called composite insurance Companies. Few of the companies were transacting either Life or general insurance business. It was more feasible to organize employees on a company-wise city base. This pattern suited, to an extent to the big units employees. Even in such units, the pattern of Organisation imposed Limitations on the struggle. Such company-wise trade was vulnerable and susceptible of victimization.

The insurance employees Federation, Bombay, a federated trade union organization was disallowed from enrolling direct membership by the Registrar of Trade Unions. This Prohibition compelled the Federation to take a decision to form a unitary organization of insurance Employees and enroll members from any company in the industry. There was another compelling reason with the prolonged strike of employees of Empire of India Life Insurance Company Limited resulting in large-scale victimization followed by the strikes in the Bombay Mutual and Bombay Life Insurance Companies, the need of organize the unorganized workers was felt. It becomes necessary to give a leadership to them.

In the process the company-wise city base organizations expanded their activities and became company-wise all India organization. Concentrations of such companies were mainly in Bombay, Calcutta, Madras and Delhi; these centers became the centers of activities. However in the most of the small companies unionisation was day dreaming. Hire & fire was the order of the Day. Wages and service conditions were far below the minimum level. Insurance Companies were closing down due to frauds & mal administration.

In this background in 1951 an all India Organisation was formed at Bombay (Mumbai) of the Insurance employees, life and general together. It is here that a demand of nationalization of insurance business was voiced for the first time on an all India forum.

In the year 1952, after the formation of an All India body of insurance Employees, an All India Charter of Demand was formulated and submitted to all the employers, the Government and the Employer's Association. A demand to set up and All India Tribunal to adjudicate the demands was made. The common charters of Demands become the rallying points. However, after the failure of negotiations between the employee's representative and the Employers Organization despite the efforts of the Ministry of Labour, government of India, the employees in the big companies, where the employees were organized on company-wise basis, signed separate settlements on the demands. This frustrated the demand for an All India Tribunal.
During this time biggest attack was in the all India General Insurance Company Limited owned by the Potdars. The Organised Insurance Employees fought back. The Late Com. N.M. Joshi presided over a mass rally to protest against the victimization, the rally demanded central intervention when the then Labour Minister Shri. V.V. Giri intervened and the CLC came in. The intervention failed, the Government appointed an industrial Tribunal on the wage demands, as also on the demand for reinstatement of the victimised employees. Unfortunately the efforts did not bring back the victimized employees into service except on out of them. The rest were lost. The demands were partially met with by the Tribunal. Although the struggle had very little effect it gave tremendous impetus to the Organisation movement.

The late Com. N.M. Joshi, during the struggle against victimization in all India General Insurance Company, advised the trade unions in the industry to organize into a unitary Industry-wise Organisation to effectively cater to the needs of the employees and repulse the attacks of the employers as well as to pool the resources for a better struggle. Thereupon the Insurance Employees Federation, Bombay decided to form a trade Union Organisation as suggested by the Late Com. N.M. Joshi with the objective of building up single industry-wise Organisation merging with it ultimately all the company-wise unions.

The Organisation grew. Both foreign and Indian Insurance Companies employees joined the ranks and a few settlements were signed, both on wages and service conditions as also on retrenchment victimization and the like. The Union earned name and fame. The employers had to recognize and reckon with the facts of life.

In the year 1956 Life Insurance was nationalized. The life Insurance employees who were also members of the Bombay Insurance Employees Union were directed to join a separate industry-wise trade union Organisation of Life Insurance employees which was formed consequent upon nationalisation. By this division the problems of the employees of these two sectors became different in character. Life Insurance Employees got security of their jobs while general insurance employees WHERE LEFT OUT. Out of about five thousands employees in the country hardly about 1500 general insurance employees were organized and that too mainly from Bombay, Delhi, Calcutta and Madras. Therefore, while in LIC Unionisation was not an acute problem, in general insurance it was a major problem to organize employees. The LIC employees were more in number and spread all over the country, while general insurance employees comparatively fewer and concentrated in major cities.

The organizational forum AIIEA was dominated by the LIC employees. It was common experience that in any organizational meeting, agenda on general insurance was growing apathy for general insurance employee's problems amongst life employees. The issues were also different. The Life Insurance policy was for the lifetime whereas in general insurance it is for one single year.

Campaigns after campaign for nationalization had to be carried-out by general insurance employees. Even funds for such national campaigns were not provided by the All India Organisation. It is since then, the GIEU. Bombay has been funding the campaigns and took upon itself the responsibility of an all India center for directing General Insurance Employees movement.
The General Insurance Employees Union, Bombay started off well. More unorganized employees swelled the ranks. Nevertheless they were haunted by the fear of victimization, retrenchment, wage-cuts and closure of companies. The Organisation made a body bid to re-organise, regroup and repulse the attacks. A number of struggles were successfully launched for monetary demands and against attacks on the workers. The demand for nationalization of General Insurance was continuously raised. A powerful campaign was launched. Despite propaganda by antagonists of nationalization the General Insurance Employees Union (by then renamed as General Insurance Employees Union, Western Zone, Bombay) countered the propaganda. The GIEU W.Z. took upon itself the responsibility of an All India movement of General Insurance Employees. It not only financed but assisted unionizing employees at other centers. After a bitter struggle in Bombay, Madras and Calcutta settlement's benefits were extended to employees at other centers who were scattered and not unionized. On receiving such enhanced wages through GIEU W.Z. those employees joined the ranks.

The GIEU W.Z. Bombay piloted to only the movement for nationalization but also for economic demands. There were not les than 100 company-wise settlements and a few industrial settlements to its credit.

Once more came a set back in the united movement. A part of foreign insurance Co.'s employees went out of GIEU & signed an agreement betraying genuine aspirations of the employees. It is to the credit of GIEW W.Z. that for the Overseas General Insurance companies employees an industrial settlement was signed in the year 1969. This standardized the service conditions of the Overseas General Insurance employees. Late Com. Madan Mohan played an important role in arguing this issue to arbitrator Mr. Abhyankar (Ex-Judge).

At the same time at Nagpur under the guidance of Shri Pradeep Ranjan Raul of Calcutta formed a Union in 1954. Com. M.R. Bhalerao, Com. Madan Shrivstav and Com. S.K. Tiwari were elected as President, General Secretary and Treasurer. But soon after the Nationalisation of LIC the employees of General Insurance had detached from the said union. Thereafter the employees of General Insurance tried to form their own union. Ultimately in 1960 employees of National Fire got success to form a union with seven members and named the union as the Vidharbha General Insurance Employees Union.
In 1968 Late Com. V.R. Deshpande became General Secretary and along with Com. Nana Jaywant made all efforts to organize the General Insurance employees in Vidharbha area. Nagpur became an important centre even to manage the Organisation at Raipur and Jabalpur.

In 1970 Nagpur based General Insurance Employees under the able leadership of Com. V.R. Deshpande attended the first conference of formation of GIEAIA at Mumbai. The Vidharbha General Insurance Employees Union has merged with the General Insurance Employees Union Western Zone. Com. V.R. Deshpande served the Organisation till has last breath. It was Com. Deshpande who took initiative to submerge Organisation in GIEAIA which is a rare as everyone wants to hold on to his Organisation and position as we witness today.

After the announcement of takeover of General Insurance Industry on 13th May 1971 and awareness towards unionization, unity started amongst the employee of all erstwhile units.

Com. Vasant Shintre was the guiding force of General Insurance Employees. 18th May 1971 was the day on which under the able leadership of Com. Shintre all General Insurance Employees at Indore had come together and decided to organize themselves under the banner of GIEU(WZ). This was the meeting which presided over by Com. N.D. Neema the then President of MP Bank employees Association and was held in the office of MPBEA itself. This foundation meeting elected Com. Vasant Shintre, Com. M.D. Sinnarkar, Com. Devendra Jain as founder President, Branch Secreatary and Treasurer of Indore branch of GIEU(WZ) respectively.

In building GIEW(WZ) in Madhya Pradesh as Indore Division Insurance Employees Association is a Trade Union School for every GIEU leader. Com. Shintre is guiding force, friend and philosopher behind it. He is a man who continuously engaged in strengthening the Trade Union movement in Indore and Madhya Pradesh.
In Goa Com. Augustino who was transferred from Nagpur Organised the employees in Goa in the year 1975 and GIEU(WZ) unit was formed.

In Gujarat after Nationalisation all companies are merged together in 1976. During this period Com. Amrutlal Talati, Com. Jayant Upadhyay and Adv. Kishorbhai Dixit made all efforts to organize the General Insurance Employees in Gujarat. Ahmedabad became an important centre to manage the Organisation. Baroda Centre was subsequently became a strong centre of the union. All the unionists of various companies in the Gujarat State merged in 1976 and became a part of GIEU(WZ).

Economic demands and gains were not everything for a trade union movement. Therefore the GIEU WZ. Continued its struggle for nationalization of General Insurance and exposed corruption, malpractice, closures of cos. And other evils in the industry. Drain of valuable foreign exchange was one important factor which brought to the floor of public opinion. Facts were connected and presented to those in the high echelons of the Government.

In the year 1968 the campaign forced Govt. to bring social control by amending Insurance Act 1936 to scuttle nationalization.

GIEUWZ provided manpower, organization and finance to hold a Convention of General Insurance Employees on an All India basis in the year 1970. Almost all unions Company wise, City / Area wise, Zone wise in different forms were brought together on a common platform known as General Insurance Employees All India Council of action. This council was charged with the a) responsibility of rationalization of service conditions of the employees, b) nationalization of General Insurance industry, and c) fight for the demands pending in various tribunals and other statutory bodies. The movements gained in strength, the rallying point being the nationalization and the economic demands. The unorganized employees slowly got organized. In western Zone itself hardly anybody remained form Unionised. With the growth there was also the evil trend of dissention.

Again in 1970 yet another convention was held. This convention was attended amongst others by non-affiliated trade unions who has by then realized the dire need of an Organisation exclusively of general insurance employees. Sensing the urge of the masses and need to create broad base to launch powerful struggles for Nationalisation, this convention constituted yet another body called Council of Action. The council of action prepared once again a memorandum on nationalization of General Insurance of submission to the Government and also for presentation before the bar of the public opinion. An informative document called 'A Case of Nationalisation' was simultaneously prepared. It may be of interest to note that by the piercing campaign launched by the 'council of Action' under the able guidance of the 'Sub-committee' the entire private sector and more publishing anit-nationalisation literature, not in Indian journal but in American journal, 'Readers Digest'.

India insurance Companies Association management has played a leading role. They hired intelligentsia Economists, Theoretician's etc., Forum of Free Enterprise produced literature and campaign against nationalization. Such literature was posted to every employee's residence in his/her personal name. Such was the counter offensive of the powerful private sector. And yet the campaign launched by the employees through their limited resources had a desired effect.

Political expediency of the then Government coupled with the strong movement of General Insurance employees made the Government to takeover the management of General Insurance industry, a prelude to nonationalisation 13th May 1971.
The goal set by general insurance employees union while formation on 12th May 1954 was thus realized in 1971.

The GIEU W.Z. took the opportunity of further uniting EMPLOYEES into a single trade union Organisation in the name and style of GENRAL INSURANCE EMPLOYEES ALL INDIA ASSOCIATION. This was formed on 01-08-1971. This second Convention was also hosted by GIEU W.Z. with its money, material and manpower in Bombay(Mumbai) on 31the July & 1st August 1971. Seventeen unions represented by 335 delegates form all over India united in GIEAIA. AIEAIA though passed a resolution in its Nagpur W.C. for such unity walked away from the said convention. The chunk of employees represented by New India Federation kept away. In order to keep New India Federation's identity & dispel its apprehension, GIEAIA offered them affiliation as a union. Still they remained away. However out of 16000 employees more than fifty percent got united under GIEAIA.

GIEU(WZ) has to its credit giving shape to its All India Organisation as also various schemes of Service Conditions of the employees several said to the Part Time, Casual, and Contract Workers are regularised by the Organisation during transitory period. GIEU (WZ) vehemently fought the issue of 120 temporary employees in New India and 52 employees in Oriental who were appointed on purely temporary basis. After prolong struggle like grate Demonstrations, Three One-Hour Strikes all these employees were taken on permanent basis.

Similarly the watchman working on contract basis in New India and GIC was prestige issue for GIEU(WZ) and the management. GIEU(WZ) fought their case in Bombay High Court for more than four years. Finally GIEU(WZ) won this case and the entire contract basis Watchman got regular services in respective assignments. This was a feather in the cap of GIEU(WZ).
In fact what is today in the General Insurance industry for the employees can be proudly said to be because of the main role played by the GIEU W.Z. inspire of the act there are number of rival Organisation in the Industry, it can be said that the General Insurance Employees All India Association is the main-stay of the employees in the industry and the GIEU W.Z. forms the back-bone of the entire General Insurance Employees movement.

This organization - General Insurance Employees Union Western Zone is Celebrating its Golden Jubilee year and 25th biannual Conference form 22nd to 24th August 2004 at Kolhapur a city well know for social & Political movement.
On this occasion the General Insurance Employees Union W.Z. owes unto it's duty to salute the entire General Insurance Employees in the country in General and the General Insurance Employees organized under it in Maharashtra, Gujarat, Madhya Pradesh and Goa in particular. It also remembers those who sacrificed during the period of last fifty years in the struggle for emancipation of workers in the industry as also for cleansing the General Insurance industry even after nationalization. The GIEU is indebted to its leaders like Late Com. K.S.B. Pillai, Chitnis, Madan Mohan, M.N. Pandit, J.G. Kothare, V.R. Deshpande, P.S. Kulkarni & many others. GIEU is proud that could spearhead a movement for rationalization of service conditions of the employees, smooth integration of the companies and bringing about good employee-employer relations in the industry. The General Insurance Employees Union W.Z. is ceaselessly endeavoring to improve and there can be no doubt that it shall strive every nerve to dedicate itself to the task of upkeeping the industry, catering to the needs of the employees, the clients and contributing to the national wealth.

In the wake of sweeping changes in economic policies of government and the alleged pressure of numerous agencies like IMF, World Bank etc. The performance and validity of various public sector units are being debated in the country with enthusiasm. This new wave in certain schools of thinking has not failed to touch the insurance industry particularly the General Insurance Industry. The controversy sparked off by the United States stand of invoking provision of super 301 relating to general insurance has particularly fuelled thinking on this subject.

We have examined the entire issue of privatization of General Insurance Industry not only from the point of view of the employees but have attempted to see it as citizen of India. Following are the two fundamental concepts of General Insurance:

• "Sharing loss of the one by all and ultimately by the community."
• "Managing the funds of all contributors most efficiently for the economic protection of all the contributors".

The above two concepts are not strict Commercial concept, they are entirely social in character. This explains the rigorous government controls in most countries in this business. In the light of the social character of the fundamental concepts of insurance, the question arises "Should Insurance be ever transacted in Private Sector!".

There are some who contend that the takeover of the management of General Insurance business by the Union Government in 1971 and subsequent nationalization of this industry in 1973 was a political decision. Irrespective of the political considerations the following conditions obtaining in the General Insurance Industry in India before nationalization precipitation this step:-

• Rampant rebating and black money generation
• In-disciplined market
• Low growth rate
• Low capacity
• Low skills
• High reliance on reinsurance i.e. as much as 53% leading to increased cost of Insurance
• Low profits

We analyze 31 years of performance of the General Insurance Industry in the nationalized set up, we find the following:-

• Phenomenal Growth
• Enormous expansion in product range
• Development of high level of skills. Export of personnel.
• High profits
• Investment yield of 13.2% of GIC in spite of social control in comparable to the international growth average of 12 -14%. As a matter of fact majority of the American Insurance Companies now in liquidation of facing liquidation have arrived at that stage due to speculative investments in real estate.
• Low reliance on reinsurance. Only 15% of the business underwritten is reinsured.
• Development and promotion of rural insurance business.

Looking at it from the point of view of the insuring public the following criteria should b present in a desirable insurance company.

• Solvency
• Capacity
• Competence
• Fair rates
• Customer concern

If we look at the Balance Sheet of GIC and it's subsidiaries between 1973 and 2002, we shall find that, in the spheres of solvency, capacity and competence this industry has thrived in Leaps and Bounds only after nationalization. Now if we examine the question of fair rates, it will be found that except motor Insurance premium there has been almost no rise in premium rates in the General Insurance Industry after nationalization. Additionally it should be borne in mind that only during the post nationalization period the fire rates have been brought down substantially thrice. There is no memory of any reduction in premium rates in Indian Insurance Industry in the decades before nationalization.

On customer Concern, we find that this industry have repeatedly bent backward for the corporate clients after nationalization. Tropically, the champions of privatization are the corporate clients. It may be argued that the degree and intensity with which the customer service is persued today in the service sector in United Kingdom, Europe and America is not followed by the insurance industry in India. This alone can not be a plank for the demand of the privatization. The organizational structure of GIC and its subsidiaries, have assured a certain degree of competition in the general insurance market in India. If it is found that we have not been as customer responsive as the international market then quoting the words of Shri S.V Mony, Ex-Chairman of GIC "We need sensitization of the industry and not privatization.

Privatization of General Insurance Industry in India today will lead to:-

• A. fragmentation of markets resulting in -
  • a. Slowing down of capacity building.
  • b. Greater reliance on reinsurance
• B. After a brief honeymoon with the cut-throat competition in a non-tariff market, it will again lead to freezing of rates as it has happened in Singapore.

The world over there is a capacity crunch and rapid technological strides will produce giant Organizations of astronomical values. Enormous concentration of economic wealth in pockets will result in catastrophic losses due to natural disasters. Therefore, the need today is of capacity building to cope with tomorrow's scenario and not to create a condition, which will lead to fragmentation of existing capacity.

The story of General Insurance business in India in the public sector has been that of a grate success. Mere belief in a different school of economic thought should not compel us to shut our eyes to the Success already achieved. For the sake of different beliefs we should not demand privatization and demolition of successful Organisation. Compared to the success achieved by the industry in the public sector the shortcomings are few and of rectifiable nature. Therefore from the point of view of social cost it will be easier to devote attention to the effort of removing the shortcomings instead of dismantling the existing set up and installing a new order in this sector of our economy.

GIEU(WZ) has taken the lead to submit the petition of parliament. Com. K.S. Samant along with two comrade from GIEAIA & United forum of General Insurance Employees Association submitted the petitions against the recommendation of Malhotra committee, which parliament has gone through. The committee opined that 'the time has not come for departing from the earlier nationalization objectives of the insurance sector and would recommend continuing with the existing policy frame work along with improving the systems for higher efficiency'.

GIEU(WZ) prepared a Memorandum consisting the Pros & Corns of the effects of privatization and demerits of the De-linking of four Subsidiaries from GIC. The Memorandum was submitted to the Parliament and Standing Committee on Finance dated 16th April 2001 and 6th November 2001 respectively. GIEU(WZ) also took lead in submitting representation to the Lok-Sabha Secretariat requesting to merge all four subsidiaries in to ONE SINGLE MONOLOTHIC CORPORATION to avoid the cut-throat competition and make the Public Sector Insurance Stronger to fight the Private Sector Players in the market.