Apropos The FM Has An Insurance Policy (Feb 4), in a policy regime where psu shares are forced upon LIC by the government, there should be a moral covenant dictating that something worthwhile will be left for the policyholders. Not what happened to ongc shares some time ago.
Ashok Lal, Mumbai
The uncertain share market is a matter of concern for LIC. It was left unscathed in the global meltdown thanks only to its continued regulation. The Centre, through this legislation, intends deregulation. This may ultimately hurt insurance policyholders.
C. Chandrasekaran, Madurai
The LIC plays an important role in the country’s econo–mic standing too. The government’s decision to take liberties with the LIC’s investment structure has raised many questions. We need to wait and watch to see if the new approach bears fruit.
Xavier Albuquerque, Mumbai
The author Ms.ArtiSharma has rightly triggered a debate over the pattern of investment in LIC. The vision of Pandit Jawaharlal Nehru, who nationalised Insurance Sector, amalgamating the then 240 private companies booked for mendacity of all sorts, proved right. That the client base of LIC expanded to 35 crores, fourth nation in the world population , bears testimony to its good will and trustworthiness earned all along.LIC is uno-numero in claims settlement internationally, keeping its Indian competitors at bay, who struggle hard to make a dent into its market share. Ever since the smoke of privatisation started sneaking into national economy, say from ninetees,slew of measures like dividing LIC into 5 zones were tried only to beat a retreat due to the protracted struggle of the major trade union, the All India Insurance Employees Association. The signatures of policyholders obtained in crores through out the nation, could halt the move. The NDA government passed IRDAct as the Congress hardly opposed it. Now UPA II intends to raise the cap of FDI to 49% from the present 26%, against the unanimous recommondation the Parliamentary Standing Committee headed by Yashwant Sinha. When LIC could collect FDI of Rs.6600 in five years, the centre's claim for higher FDI appears hollow and unrealistic. LIC is pushed into a different investment climate now. The uncertain share market is sure a matter of concern for LIC which acts as a trust of policyholders committed to meet out their future claims. The returns for the present mandatory LIC investment in PSUs may account less, though otherwise compensated by its security. When all global insurers could hardly escape the tsunami of global melt down, LIC was unscathed thanks to its continued regulations. The centre through the present legislations intends deregulation. This may ultimately speak badly on insurance savings held by Insurance policy holders.
LIC is a giant mammoth our government has and it is making use of it. LIC has been insuring lives for years now but not to forget it plays as important role in the countries economic standing. The goverment decision to be liberal in the investment structure of LIC has left many to think and to ask question. But not to forget LIC always made long term investment which makes it much stable in its investment approach. Well the amendment will clash with the other subsidiary laws but that is a small issue. I am glad of the changes that has taken place in LIC funding. It new approach needs to be wait and watch to see its fruit.
When PSU shares are forced upon LIC by the government, there should be a moral covenant that something worthwhile will be left on the table for the policy holders. Not what happened with ONGC shares some time back.
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