Appointment of LIC Chairman

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    • The government has named Siddhartha Mohanty as the first chief executive of the Life Insurance Corporation of India (LIC) for the term beginning in June 2024 to June 2025.
      • The Financial Services Institutions Bureau (FSIB) recommended Siddhartha Mohanty’s name for the post of chairman. The decision regarding the appointment of Mohanty as the LIC chairman was taken by the Appointments Committee of Cabinet (ACC) headed by the PM

    About Life Insurance Corporation of India (LIC) 

    • It is an Indian public sector life insurance company headquartered in Mumbai. It is India’s largest insurance company as well as the largest institutional investor.
    • It was established in 1956, when the Parliament of India passed the Life Insurance of India Act, nationalizing the insurance industry in India.
    • There are a total of 8 zonal offices, located in Delhi, Chennai, Mumbai, Hyderabad, Kanpur, Kolkata, Bhopal and Patna.

    Background

    • 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning.
    • 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business.
    • 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.
    • 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.
    • 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.
    • 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
      • The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

    Indian Insurance Industry

    • India is the fifth largest life insurance market in the world’s emerging insurance markets, growing at a rate of 32-34% each year.
    • The Economic Survey notes that insurance penetration in India has been steadily increasing. While this was 2.7% around 2000, this stood at 4.2% in 2020 and 2021.
    • Foreign Direct Investment (FDI) in the industry under the automatic method is allowed up to 26% and licensing of the industry is monitored by the insurance regulator the Insurance Regulatory and Development Authority of India (IRDAI).

    Financial Services Institutions Bureau 

    • It has been constituted effective from 2022, by the Union Government for the purpose of recommending persons for appointment as whole-time directors and non-executive chairpersons on the Boards of financial services institutions and for advising on certain other matters relating to personnel management in these institutions. 
    • The Secretariat of the Bureau currently comprises Secretary and four officers.
    • Vision: To Promote excellence in Corporate Governance in Public Sector Financial Institutions.

    Insurance Regulatory and Development Authority of India (IRDAI)

    • It is a statutory body formed under an Act of Parliament, i.e., Insurance Regulatory and Development Authority Act, 1999 (IRDAI Act 1999) for overall supervision and development of the Insurance sector in India.
    • The powers and functions of the Authority are laid down in the IRDAI Act, 1999 and Insurance Act, 1938. 
    • The key objectives of the IRDAI include promotion of competition so as to enhance customer satisfaction through increased consumer choice and fair premiums, while ensuring the financial security of the Insurance market.
    • The Insurance Act, 1938 is the principal Act governing the Insurance sector in India. It provides the powers to IRDA to frame regulations which lay down the regulatory framework for supervision of the entities operating in the sector. Further, there are certain other Acts which govern specific lines of Insurance business and functions such as Marine Insurance Act, 1963 and Public Liability Insurance Act, 1991.

    Source: TH