The Centre has initiated the process of appointing the next chairperson of state-run Life Insurance Corporation of India with the resolve to choose a person from within LIC for the post.
“The process for appointing the next chairperson of LIC has been started. The Financial Services Institutions Bureau would take it forward,” said a person familiar with the development.
The next chairperson would be an internal candidate as is the practice now, he further said, adding that private sector professionals may be invited for the position the next time. The move comes after the government decided not to give another extension to current LIC
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In a stock exchange filing on March 11, LIC said Siddhartha Mohanty, managing director has been appointed as the interim chairman of LIC from March 14 for a three-month period. The government is confident that the next full time chairperson would be appointed by then.
To ensure the smooth listing of LIC, Kumar, who was appointed as LIC chairman in March 2019, had been given two extensions, including one from July 2021 to March 2022 and one from April 2022 to March 2023. It was widely anticipated that he may be given another extension to help the insurance behemoth settle down post its mega IPO.
At present, the LIC top management is made up of four managing directors and one chairman. Mohanty was appointed as the MD in February 2021 and will hold office till June 30 this year. One post of LIC MD is vacant after Raj Kumar retired on January 31 while another MD BC Patnaik is set to retire at the end of this month. Mini
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Significantly, the government’s latest move also raises questions over the proposed revamp of the Board of the insurer. The Finance Act 2021 amended the LIC Act 1956 to pave the way for the abolition of the post of executive chairman in three years and transition to CEO and four MDs. It is widely expected that the government is keen on roping in private sector individuals for this role to bring and would like to complete the exercise by March 2024.
The amendment however, has a provision that if the process is not completed by March 31, 2024, then the person holding office as chairperson would be deemed to have been appointed as the CEO and MD from April 1, 2024.