Finance Ministry asks LIC to name board members in 50 firms
New Delhi: The Finance Ministry has asked Life Insurance Corporation of India to appoint board members in 50 companies in which it has a stake and no representation.
The insurance behemoth has stakes in about 123 companies, of which it has board members in 73 firms, while there is no representation in 50 companies, a senior Finance Ministry official said.
The Ministry has asked the country's only state-run life insurer to nominate its representatives in these 50 companies, the official added. The appointment of LIC board members will help the company to monitor its investments and ensure better returns, the official added.
During the current fiscal, LIC proposes to invest almost Rs 2 lakh crore in both equity and bonds.
LIC expects to achieve a 15 percent growth in first-year premium income in the current financial year after a contraction in the previous fiscal.
During 2012-13, the insurer registered a 6.5 percent fall in new premium collection at Rs 76,200 crore compared with Rs 81,500 crore during the earlier fiscal.
Meanwhile, LIC has been allowed to buy as much as 25 percent in a company, compared with the previous limit of 20 percent, under special circumstances. Earlier this year, the government had proposed to allow LIC to invest up to 30 percent in a single company.
Former Insurance Regulatory and Development Authority Chairman J Hari Narayan had opposed the proposal, saying the move to increase LIC's equity exposure limit was "imprudent."
LIC has been perceived as the last resort buyer of shares in state-owned companies to help meet the government's disinvestment target, though the Centre has denied it.