Life Insurance Corporation to have CEO, govt scraps LIC chairman post

By: |
July 09, 2021 4:30 AM

Already, to facilitate the listing of LIC, the government has hiked the insurer’s authorised share capital to Rs 25,000 crore. The department of economic affairs has also tweaked the Securities Contracts (Regulation) Rules.

The finance ministry has notified the changes to the Life Insurance Corporation of India (Employees) Pension (Amendment) Rules. Moreover, some other rules under LIC Act, 1956, have been amended.The finance ministry has notified the changes to the Life Insurance Corporation of India (Employees) Pension (Amendment) Rules. Moreover, some other rules under LIC Act, 1956, have been amended.

Ahead of Life Insurance Corporation’s (LIC’s) proposed initial public offering this fiscal, the government has tweaked rules to stipulate that the state-run insurance behemoth will now have the post of chief executive officer and managing director instead of chairman.

The finance ministry has notified the changes to the Life Insurance Corporation of India (Employees) Pension (Amendment) Rules. Moreover, some other rules under LIC Act, 1956, have been amended.

In a gazette notification, the department of financial services said: “Chief Executive and Managing Director means the Chief Executive Officer and Managing Director appointed by the Central Government under section 4 of the Act (LIC Act 1956).”

The IPO of LIC is part of the government’s broader divestment goals for FY22, including privatisation of two banks and an insurer and other non-financial entities. The government has set its overall disinvestment target for FY22 at Rs 1.75 lakh crore, about three-and-a-half of times the actual realisation last fiscal.

Already, to facilitate the listing of LIC, the government has hiked the insurer’s authorised share capital to Rs 25,000 crore. The department of economic affairs has also tweaked the Securities Contracts (Regulation) Rules.

Following the latest amendments, companies that have a market capitalisation of over Rs 1 lakh crore at the time of listing can now offload only 5% of their shares. These companies, however, will have to raise their public shareholding to 10% in two years and to 25% per in a total of five years.

The government had identified more than two dozen changes in the LIC Act to comply with the listing norms and distribute shares.

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