India aims to appoint a private sector professional as the first chief executive of the Life Insurance Corporation of India in an effort to modernise its largest insurer after a disappointing stock market debut.
A private sector appointee to lead India’s largest insurer, which manages 41 trillion rupees ($500.7 billion) in assets, would be a first in its 66-year history.
The government is planning to broaden the eligibility criteria for appointment of LIC CEO so that private sector candidates can apply.
The Ministry of Finance, which oversees the LIC, did not respond to emailed questions.
The insurer is now headed by a chairman but that post will be scrapped when the term of the present incumbent ends in March.
After that, the government will appoint a chief executive from the private sector, they said. Changes to the law that governs the LIC were made last year to enable this.
The move will lead to more choices and send good signals to shareholders.
The insurer’s share price has taken a beating since its listing in May last year and trades 30% lower than the price at which the shares were issued, wiping off nearly 2 trillion rupees ($24.31 billion) in investor wealth.
A former finance secretary, Subhash Chandra Garg, said he agreed with the idea that the pool of professionals eligible to lead the insurer be widened beyond sister, state-run firms.
While a decision on appointing from the private sector had been made in principle, the government was considering whether further changes to the law were required and if the government could offer pay in line with the private sector.