Mumbai:
Post making changes to relevant rules facilitating the post of Chief Executive Officer and Managing Director instead of an executive Chairman position in the IPO bound Life Insurance Corporation, the government has clarified that it will be business as usual for the corporation with the existing top management which is consisting of a chairman,who will be now called as a chairperson instead and posts of four managing directors continuing for the next three years.
Issuing a circular on last Friday,, LIC has said as per section 4 (2) (a)of the amended LIC Act, 1956 which has become effective from 30th June, 2021, the erstwhile whole time position of chairman would be “Chairperson” during the initial period of three years,
The designation of MR Kumar would be chairperson instead of chairman, said the LIC circular.
Recently, Kumar , who was scheduled to retire on June 30, had got an extension till March 2022 so that there will be a continuity in the post for better management of LIC's proposed mega IPO..
Industry observers have said it is unique for LIC to have a post of `chairperson' but the corporation will continue to have an executive chairperson and four managing directors for the next three years.
Earlier, ahead of the insurer's initial public offering(IPO) this fiscal., on the pattern of public sector banking industry, the government had said Life Insurance Corporation of India will now have the post of Chief Executive Officer and Managing Director instead of an executive Chairman position, with the government making changes to relevant rules.
The changes have been made by the Department of Financial Services under the finance ministry by amending Life Insurance Corporation of India (Employees) Pension (Amendment) Rules. Besides, some other rules under LIC Act, 1956, have been amended.
"Chief Executive and Managing Director means the Chief Executive Officer and Managing Director appointed by the Central Government under section 4 of the Act (LIC Act 1956)," according to a gazette notification issued on July 7.
Currently, LIC's top management consists of chairman and four managing directors. The chairman of the LIC is a government of India secretary rank officer.
To facilitate the listing of the insurance behemoth, the government has already approved raising its authorised share capital to Rs 25,000 crore.