Ending a four-month long suspense, the government will soon appoint VK Sharma as the new chairman of life insurance behemoth LIC after the premature departure of SK Roy on health grounds. Sharma, a managing director in the life insurer, currently holds additional charge of chairman. Roy, who tendered his resignation in June, was relieved of his duties on September 16.
“Sharma’s name has been finalised,” a senior government official told FE.
The Appointments Committee of the Cabinet is expected to announce the appointment of Sharma shortly. There were at least four other contenders for the post, including another managing director Usha Sangwan. The other contenders were an executive director and two chief general managers of the company, another official said.
Unlike many other public sector entities, the LIC chairman is selected by the government from within the
organisation, but not on the basis of seniority.
While there were speculations about the reason for Roy’s resignation two years ahead of completion of his five-year term, officials have dismissed rumours of any pressure on Roy from the government.
LIC, the country’s largest life insurer, invested close to R2.7 lakh crore in equity and debt instruments in FY16. Of this, it invested R65,000 crore in equities. It has invested heavily in stocks of public sector banks who are going through a capital constraint due to sharp increase in their bad loans. The insurer has also invested substantially in most of the Centre’s big disinvestment in PSUs in the recent years, including in the R9,369 crore offer for sale in Indian Oil Corporation in 2015.
Sharma has been serving as the managing director of the company since November 2013. Having joined the body as a direct recruit officer in 1981, Sharma has also served as the chief executive of its mortgage subsidiary LIC Housing Finance and zonal manager in charge of LIC’s south zone. Out of three managing director posts in LIC, only two are occupied now, while one is vacant.
Despite opening up of the life insurance sector to private participation in 2000, LIC continues to be a dominant player in the sector with a share of about 70% by insuring lives of 25 crore people.