Even as the much awaited merger of the three public sector general insurance companies-Oriental Insurance Company(OIC), United India Insurance(UII),National Insurance Company- has been further delayed beyond Apr 1, 2020,the Banks Board Bureau (BBB), on May 11, will be conducting virtual interviews of five senior general managers of the industry,with two years of residual services,to select a chairman & managing director of Delhi based OIC.
AV Girija Kumar,CMD,OIC,is retiring this month end after reaching 60.
Currently, B P Sharma heads a seven-member panel to select chairman and managing directors of public sector insurerance companies and banks and interviews for selecting a CMD for OIC have to be done through video conferencing as the country is under lockdown till May 17 to check the spread of Covid-19 Pandemic. .
The general mangers who have been shortlisted by the ministry of finance(MoF)are-SN Rajeswari,New India Assurance(NIA) Dinesh Waghela(OIC), Sobha Reddy, National Insurance Company(NIC),Deepak Godbole,GIC Re, Madhulika Bhaskar,GIC Re.
While both Rajeswari and Waghela,the senior most general manager in the PSU general insurance industry,have exactly two years of residual of services,from the day the post of OIC CMD is falling vacant,the others have longer period of services.
In another recent interview,Rajeswari had emerged as the stand-by candidate for the post of CMD of Agriculture Insurance Company (AIC). Malay Poddar was appointed to the post in Dec,2019.
With the move to appint a new CMD at OIC,there are now clear indications that the government is not in a hurry to implement the 2-year old merger proposal among the three PSU general insurers, said analysts.
“There was no need to appoint a successor to Girija Kumar at OIC, if the government has plans to effect the merger proposal soon.Girish Radhakrishnan,CMD,UII and Tajindrer Mukheerji,CMD,NIC,have services till June 2021 and in case the merger would be completed soon, one of them can head the merged entity,that would be the largest general insurer in the country.
In fact both Radhakrishnan and Mukheerji have applied for the post member,(Distribution),IRDAI, that has fallen vacant after Sujoy Banerji,retired in Jan end.The interview for the member(Distribution),IRDAI,is already delayed.
Recently,in a bid to prepare for three companies,which are financially weak,for the merger,the government had infused Rs 2400 crore into NIC. Similarly Rs 50 crore was infused in to OIC to strengthen its solvency position.Even the board of each of the three PSU general insurers have also passed resolution about the merger proposal.
However, of late, there has been no word about the merger from the MOF
Meanwhile,the MoF has stopped appointing directors in the four PSU general insurance companies for almost two years and as a result majority posts of directors– out of eight -are currently lying vacant in the four PSU general insurers.
MoF wants to revamp the ways the whole exercise to appoint the directors in these companies were conducted.
Instead of existing system of automatic appointment of the senior most general manager as the director of a company, the MoF wanted to follow the same system that is pursued for the selection of a CMD.
But, nothing has happened so far leading to the disappointment of senior officials who are missing opportunities to become directors of a company.