The public sector insurance major – Life Insurance Corporation (LIC) – remains the numero uno even after going for the IPO and the value of its assets remains at ₹39 lakh crore. This underlines the importance of safeguarding the public sector insurance industry, K. Venugopal, former national secretary, All India Insurance Employees Association (AIIEA), has said.
He was speaking at a seminar on ‘Public Sector Insurance Industry – Our Task’, organised by the Insurance Corporation Employees’ Union (ICEU), in memory of the departed leader N. Ramanachalam, here on Sunday.
Mr. Venugopal explained that the number of policyholders remains unchanged at 40 crore and nothing has changed. The value of the company was not related to the stock market activities. With the advent of LIC IPO, two crore people have entered the speculation market.
The institutional buyer firms from Singapore and one Canadian firm and mutual fund managers took the maximum benefit of the disinvestment of 3.5%, amounting to ₹21 lakh crore (undervalued), and this was sheer loss to the policyholders, who were the actual stakeholders, he said.
The former AIIEA national secretary elaborated on the repercussions of selling ‘non-participating policies’ instead of ‘participating policies’, which was also detrimental in transferring the surplus to the policyholders. The IPO would necessitate the LIC to maintain two ‘Life Funds’ for participating policies and ‘non-participating policies (for transferring the surplus to shareholders).
The selling of more non-participative policies would ultimately result in a drop in the total premium income. Referring to the National Monetisation Pipeline (NMP), he said the government was targeting ₹80,000 lakh crore through the sale of public sector assets, including natural resources. He reminded that the continuous struggles by all cadres had delayed by the IPO by 30 long years, after the introduction of the LPG policies.
He called upon the cadre to wage battles, involving the policyholders, to prevent further disinvestment of LIC.
