The Appointments Committee of the Cabinet (ACC) headed by Prime Minister Narendra Modi has finally approved the proposal of the Department of Financial Services for framing of guidelines for appointment of EDs in all public sector general insurance companie

Currently, nine posts of EDs- two each in GIC Re, OIC, NIC, AIC and one in UII have to be filled up after completing all official exercises

New Delhi:

The much delayed interview for filling up the nine posts of directors in the PSU general insurance industry will be taking place soon as much like PSU  banking sector, the government has now cleared the move to appoint executive directors in place of general manger & directors(GMDs) in a PSU general re/ insurance company.

Previously, the government had appointed 10 GMDs in the PSU general insurance companies in November 2022.

Unlike a GMD who used to continue with the same salary which he or she was drawing as a general manger, an ED of PSU general insurance company will now receive a higher salary which is yet to be finalised by the government.

The Appointments Committee of the Cabinet (ACC) headed by Prime Minister Narendra Modi has finally approved the proposal of the Department of Financial Services(DFS) for framing of guidelines for appointment of EDs in all public sector general insurance companies including GIC Re, New India Assurance(NIA), National Insurance Company Limited(NIC), Oriental Insurance Company(OIC), United India Insurance Company (UIIC) and Agriculture Insurance Company who are members of the GIPSA, the official coordinating agency for all these six companies, said a notification by the ACC.

Each of these companies will have two posts of EDs. Currently, nine posts of EDs- two each in GIC Re, OIC, NIC, AIC and one in UII have to be filled up after completing all official exercises.

Though, the proposal to convert the post of GMD into ED was initiated years back, the government has notified the resolution on Thursday after ACC’s approval.

Going by the new appointment framework for EDs, all general mangers of PSU non-life insurance companies, who have served for a minimum service of one year and have a residual service of at least one year on the date of vacancy of the ED post, are eligible to be considered for appointment as ED in such companies, said the government notification.

The minimum service and residual service requirement maybe relaxed with the approval of the Finance Minister, if sufficient candidates are not available in the zone of consideration, clarified the notication..

According to the ministry of finance sources, currently there is an acute shortage of senior officials, to fill up nine existing posts of EDs, who have  already become general mangers for one year and still have residual services of two years. In view of this , the government, for shortlisting of candidates for the forthcoming interviews for selecting of EDs, has to include the names officials, who have become general managers in Fy2023-24, with the special permission of finance minister Nirmala Sitharaman.

Also, now it is now clear that all future posts of  CMDs, in the PSU general insurance industry, will be filled up by promoting officials who have become EDs and like earlier occasions, GMs will not be eligible for the CMD interviews.

In fact, shortly, two posts CMDs in the PSU general insurance industry will fall vacant as S Tripathy will be completing his terms in UII in February(2024) end after reaching 60 while similarly Neerja Kapur will be calling it a day as CMD of NIA in April(2024) end after reaching 60.

However, there are speculations that both Tripathy and Kapur may be given extensions by the government for a few months as there are only two senior officials(general mangers) in the PSU general insurance industry, who have completed two years of services and still have two years residual services, one of the key eligibility criteria of a candidate to be shortlisted for the CMD selection.

Only Hitesh Joshi, general manager, GIC Re and BS Rahul, general manager, Agriculture Insurance Company(AIC) are the only two senior officials in the whole of PSU general insurance industry, who are eligible for shortlisting. But, the government normally shortlists 5 candidates for the selection of two CMDs.

Even, the Prime Minister office (PMO), which is the final authority on such senior level appointments at PSUs, insisits on two names against each vacancy. Though, the Ministry of Finance(MoF) had sent the name of Inderjeet Singh, one of the general mangers of NIA, on the basis of his selection by the then government’s headhunting agency BBB, to be appointed as CMD of UII, the PMO, however,had finally picked up Tripathy, who was the alternative candidate for the post.

With this scenario, before conducting any possible interviews for appointing two CMDs, the government will first appoint nine EDs out of which there can be names for shortlisting of larger number of candidates for selecting two CMDs though none of these candidates would have completed at lease one year as ED, one of the criteria for the selection of CMDs in the PSU general insurance industry.

The government’s headhunting agency  Financial Services Institution Bureau (FSIB), which selects top officials of PSU banks insurance  companies will also select the EDs. The recommendation of FSIB  will be valid for a period of up to one year or as per orders issued by the Government of India, and maybe extended with the approval the ACC, said the notification.