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Updated: November 26, 2010 16:35 IST

Scam by individuals, not LIC: Chairman

PTI
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File photo of T.S. Vijayan, Chairman, Life Insurance Corporation of India. Mr. Vijayan is believed to have briefed the Prime Minister’s Office officials about the racket.
The Hindu File photo of T.S. Vijayan, Chairman, Life Insurance Corporation of India. Mr. Vijayan is believed to have briefed the Prime Minister’s Office officials about the racket.

The country’s largest insurer Life Insurance Corporation (LIC) on Friday said the organisation is “very strong” and the housing finance racket involved only individual officers who will be taken care of by the CBI.

“Scam means somebody is misusing money... somebody is losing money... these are false schemes. It is proven that they (arrested by the CBI) are individuals who are charged by CBI. That (legal procedure) will take its own course”, LIC chairman T.S. Vijayan told reporters here.

As far as departmental action against officers involved in housing racket is concerned, he said, “staff regulations are there and we will stick to them.”

The CBI had arrested the CEO of LIC Housing Finance Ramachandran Nair and LIC Secretary (Investment) Naresh K. Chopra besides other bankers for their involvement in the housing finance racket.

Mr. Vijayan on Thursday met officials in the Prime Minister’s Office (PMO) and is believed to have briefed the officials about the racket.

Replying questions about the deficit of Rs 14,000 crore in one of its annuity policy, the LIC chief said, “we have proven that last year our surplus was Rs 24,000 crore. When we have surplus of Rs 24,000 crore what is the meaning of Rs 14,000 crore deficit, I don’t understand.

“It is a notional actuarial deficit in a particular scheme, overall we are very strong. We have provided Rs 46,000 crore in solvency margin. Appreciation in equity has been phenomenal.”

Insurance Regulatory and Development Authority (IRDA) had reportedly expressed concern over the deficit of around Rs 14,000 crore in one account covering annuity policies that offered high assured returns though the investment yields were low.

Meanwhile, the LIC appointed V.K. Sharma as CEO of its housing finance arm.

Mr. Sharma has been chosen to replace LIC Housing Finance CEO Ramachandran Nair, who was arrested by the CBI on Wednesday, and will take over as head of the organisation sometime next week. Mr. Sharma is currently in charge of LIC’s South Zone operations.

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