At a time when the finance ministry is taking pro-active steps to smoothen the process of top-level appointments in banks, the insurance sector senses no chance of such a reform.
It has been close to a year that the chairman’s position is vacant at Life Insurance Corporation of India (LIC). Going by some recent developments in the sector, the country’s largest life insurer will have to wait for a long one to get its boss. At the Insurance Regulatory and Development Authority (Irda), key positions like member (actuary), member (life) and executive director (actuary) are vacant over six months. That’s not all. GIC Re, Agriculture Insurance Company (AIC) and New India Assurance are functioning without a permanent chairman.
On the other hand, it is the ministry that tracks the appointments in public sector banks. This faced delays till a few years ago. Of late, however, the government notifies the appointment months before a position is vacant.
In addition, the finance ministry has mandated that designate-chairmen and managing directors join the bank as officer on special duty 10 to 15 days before retirement of the outgoing chairman. This was done to ensure smooth transition of leadership, to help in continuation of policy.
However, this is not so for the insurance sector. For example, even as T S Vijayan completed his term in May last year, the country’s largest domestic institutional investor is under a “temporary” chairman. Vijayan’s five-year term was over in May last year, though he still has two years of service.
Also, D K Mehrotra’s term as acting chairman has recently been extended by another three months, which comes to an end this month, according to a source. “Mehrotra’s role may be extended further, as Vijayan’s candidature is now once again being considered,” he adds.
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Sources say the Central Vigilance Commission has cleared the former LIC chairman’s name as the race for the top post opens up, so it might take some more time.
“This is probably first time in LIC’s history where there is no permanent chairman at the helm for such a long period,” says a senior life insurance company official.
However, the position of chairman is not the only key position that is awaiting permanent appointment in LIC. The insurance behemoth is currently operating with two managing directors. One is T Mathew, since Mehrotra is also given the additional responsibility of acting chairman.
This peculiar situation came into being after A K Dasgupta retired on January 31. As for Vijayan, the other managing director, he is on leave since May last year. Typically, the LIC top brass consists of three managing directors and a chairman.
It is not as if interviews have not been conducted for the chairman’s and managing directors’ posts. Yet, for some reasons, the ministry has yet to notify these. Two executive directors — Sushobhan Sarkar and S K Roy — have been short-listed for the position for managing director at LIC.
At Irda, four candidates have been shortlisted to fill two board positions — member (life) and member (actuary). Two actuaries, A Apparao and Hemamalini Radhakrishnan, have been short-listed for the positions of member (actuary), while for member (life), K Sahay and S Roy Chowdhury have been short-listed.
Sahay is currently the CEO & MD of Star Union Dai-ichi Life Insurance Company, whereas Roy Chowdhury is executive director (marketing) at LIC.
Both members (life and actuary) are equivalent to the rank of additional secretary, and occupy key positions in Irda, as their role includes product approval, product design and handling policy issues pertaining to the sector.
As for the government, it is also in the process of appointing a permanent chairman at GIC Re, AIC and New India Assurance.
Interviews for these posts were conducted by a search panel headed by Finance Secretary R S Gujral. Other members of panel included Financial Services Secretary D K Mittal, department of personnel & training secretary Alka Sirohi and Irda Chairman J Hari Narayan.