LIC chairman resigns two years before his term ends

Life Insurance Corporation of India (LIC) Chairman S K Roy has written to the government to relieve him of his duties from June 29 this year. Roy, who took charge as chairman of the country’s largest insurer on the same date in 2013, had a five-year term. The reasons for his resignation are not known. The approval of his request for being relieved of his duties will be subject to consent of the Cabinet Committee on Appointments.

A source close to the development said he had sent the request, and the government would take a call on this. An e-mail sent to the LIC chairman’s office did not elicit any response till the time of going to print.

In the recent past, there has not been any instance of LIC chairmen stepping down before the completion of their tenure. However, prior to 1985, there was one case of a chairman taking voluntary retirement, according to former LIC officials.

Roy joined LIC in 1981 as a direct recruit officer. Under his chairmanship, LIC saw rejig in products and had a revamp, with the traditional product guidelines by the regulator leading to almost all of its products in the market. This led to a big drop in new business premium collections for LIC, post which the insurer managed to see a growth in first-year premia by launching new products. 

According to provisional data from the Life Insurance Council, the collection of new premia was Rs 1.38 lakh crore for FY16, compared to Rs 1.13 lakh crore in FY15. Here, LIC posted a 25% growth in first-year premia and collected Rs 97,674 crore in FY16, compared to FY15. Private insurers saw an 18% growth and collected premia of Rs 40,983 crore.

In 2014, LIC launched its e-term plan which was its first online term plan. While several other private life insurers had launched online term products, LIC entered the online term market only two years ago and has seen favourable customer response, with respect to sales.

Last year, in August 2015, with Roy as chairman, LIC launched a new unit-linked insurance plan (Ulip), 19 months after its earlier product was withdrawn from the market. Called the ‘New Endowment Plus (Ulip) Plan’, this product was an insurance-cum-investment plan.

Similarly, in February, LIC launched its e-services aimed at enabling policyholders to have easy access to their policies, policy status and claim information, among others. The e-services will include policy image, status of policy, claim status and renewal information.

One can also choose to pay premia online with the help of these services, making the process quicker and easier. E-mail and SMS alerts will also be a part of these services. This portal would also act as an insurance repository for its policyholders.