LIC transition to top FM's Oct 21 agenda

Corporatisation of the Life Insurance Corporation of India (LIC) is one of the key agendas for discussion when finance minister P Chidambaram meets the top brass of Unit Trust of India (UTI), General Insurance Corporation of India (GIC) and LIC in Mumbai on October 21.

Essentially, the FM is coming to review the operations of the institutions and the chiefs will make their respective presentations outlining the key issues.

This would be Chidambaram's third visit to the financial capital in a span of four months since becoming FM the second time round. It would also mark his third visit to the institutions, having paid similar visits when he was the FM during the reign of the United Front government. FI chiefs said that none of Chidambaram's predecessors had spent time with the institutions in the past.

The presentation to the FM will be largely pertaining to corporatisation of the insurance institutions.

This has become a heated issue between the Insurance Regulatory and Development Authority and the finance ministry as the regulator has been on LIC's back to increase its share capital from the prevailing Rs 5 crore to at least Rs 100 crore as per regulations.

Suggestions made by consultants appointed -- Deloitte Touche in the case of LIC and A F Ferguson for the erstwhile GIC subsidiaries -- will also be discussed with the finance minister.

Other issues on the agenda also include appointment of professional directors, a proposal that has been moved by the institutions.

Unfortunately, for want of the government appointing these directors, the state insurers have had professional directors on their boards for the past two years.