In view of its exponentially growing pool of resources running into lakhs of crores of rupees, Life Insurance Corporation (LIC), the country’s largest life insurer with an 83% market share, must develop in-house capacity for proper assessment of investment opportunities, said top finance ministry officials on Saturday.
In this regard, finance minister P Chidambaram, economic affairs secretary Arvind Mayaram and financial services secretary Rajiv Takru held discussions with LIC officials and identified some thrust areas.
As the slang goes, invest to get “the biggest bang for your buck”, said Takru. “LIC should optimise its returns, only then can it pay its policyholders as per expectations.”
Being the largest domestic institutional investor, LIC will get a 30% cap (up from the current 15%, and prior to that 10%) for equity investments in a listed company soon.
The government had already okayed the proposal in January, but the Insurance Regulatory and Development Authority (Irda) had rejected it. So, the finance ministry has again taken up the issue with Irda. “Soon, it will get notified,” said Takru.
The government is also keen that LIC should reach out to the uninsured and the under-insured, and address the issue of low insurance penetration, particularly in remote areas of central India and the north-east.
Similarly, the finance ministry exhorted LIC to focus on niche marketing among targeted groups and to crack down on misselling.