GIC likely to scrap MD's post

In a bid to make General Insurance Corporation of India (GIC) a leaner organisation now that it has to compete with other reinsurance companies, the post of managing director at reinsurance giant would be abolished. The chairman's post would be converted into that of a chairman and managing director.

With P B Ramanujam having retired as managing director at GIC, the government, sources close to the development said would abolish the post and turn make the chairman's post "" CMD of GIC.

The present chairman, P C Ghosh said, "The government was considering the issue but we are yet to hear anything officially. There was a proposal on abolishing the post of managing director of the company after Ramanujam retires."

With opening up of the insurance sector and the four public sector non-life insurance companies, which were subsidiaries of GIC being made independent, and the mandatory parking of 20 per cent risk with GIC on the verge of being withdrawn, GIC will have to compete with other reinsurance majors such as SwissRe and MunichRe.

Ramanujam joined GIC on May 2002 from the Kolkata-based National Insurance Corporation and retired in July 2004. Ramanujam was a senior general manager at NIC.

The government has decided not to fill the void created as a result and that a chairman and managing director take over his tasks after the chairman retires. Ghosh is due to retire in January 2005. Ghosh was the managing director at GIC who was appointed as its chairman when its former chairman, D Sengupta retired.

It was also learnt that the new post of CMD at GIC will be made at par with present chairman and managing directors of the four national non-life insurance companies.

At present, non-life insurance companies are headed by a single chairman and managing director and the post of Chairman at GIC was technically senior to the CMDs at the four companies.

Following dismantling of the four subsidiaries from GIC in 2000, the government will make the post of CMD at par with CMD's of other national insurance companies.

This is part of the government's plan to change the focus of GIC to a sole reinsurer and the four subsidiaries as focused non-life insurance companies.

Initially there were two managing directors and a chairman at GIC. The post of one managing director at the company was later abolished when the past chairman, D Sengupta retired and the then Managing director - I, P C Ghosh was promoted to the chairman's post. P B Ramanujam who was recruited at managing director - II, remained as the MD of the reinsurance major.