The Finance Ministry is in discussions with the Insurance Regulatory and Development Authority to raise the per company equity investment limit for Life Insurance Corporation (LIC), said Financial Services Secretary Rajiv Takru.
“We had a discussion on it in the IRDA’s last board meeting. We are currently in talks with the insurance regulator to raise the equity investment limit for LIC,” said Takru after a meeting with the LIC top brass.
The cap on LIC’s equity investment in a company has been a sticking point with the finance ministry and IRDA.
The Finance Ministry has been pitching for an increase in the equity investment limit to 30 per cent.
The ministry has buttressed its case by pointing out that the LIC Act, 1959, supersedes the Insurance Act. The IRDA, in February, raised the equity investment cap for all insurance companies, including LIC, from 10 per cent to 15 per cent.
On Saturday, the Finance Minister and ministry officials held a meeting with top LIC officials to review the performance and discuss developmental issues of India’s largest life insurer.
Takru said LIC, which is sitting on a huge pool of funds and growing exponentially, needs to look at improving its in-house capacity for proper assessment-based investments to optimise returns for policyholders.
Also, to improve penetration in non-metropolitan cities, LIC, which currently has more than 2,000 branches, will open 1,800 offices this year in towns with a population of over 10,000. Each branch will have an LIC employee and an agent, Takru said.