Page 9 - Insurance Times August 2021

LIC of India

News

Govt. to invite Merchant The LIC Amendment Act has been will then place the matter before
made part of the Finance Act, thereby shareholders for their approval at the
bankers bids bringing the required legislative AGM.
The government is likely to invite bids amendment for launching IPO of the SN Ananthasubramanian, former ICSI
from merchant bankers for managing country's largest life insurer. President and practising company sec-
LIC disinvestment as it moves ahead
retary, said: "The amendments to the
with plans to launch the IPO by Janu- LIC's auditor appointment LIC Rules which introduce various as-
ary, an official said. The Department of
Investment and Public Asset Manage- turned into a board driven pects of board-monitored governance,
ment (DIPAM) had in January ap- process are essentially to make LIC IPO ready."
pointed actuarial firm Milliman Advi- The Centre has taken one more step Ashok Haldia, former CA Institute Sec-
sors LLP India to assess the embedded towards making Life Insurance Corpo- retary, said that the overhaul in audi-
value of LIC ahead of the IPO, which is ration (LIC) 'IPO ready' by turning the tor appointment provisions, "together
touted to be the biggest public issue in statutory auditor appointment into a with other amendments to the LIC Act/
Indian corporate history. Rules is a step that could enhance cor-
board driven process, in line with SEBI's porate governance and transparency,
The official further said the Budget listing requirements. Hitherto, the giving more comfort to investors look-
amendments to the LIC Act have been statutory auditor for central office and ing to come on board LIC,"
notified and the actuarial firm would zones required the Centre's approval.
work out the embedded value of the The Finance Ministry's Department of Retirement age of LIC
life insurer in the next couple of weeks.
Financial Services has amended the LIC chairman extended to 62
Under the embedded value method, Rules, 1956 for a new framework on
insurance companies' present value of the selection of auditors. years
future profit is also included in its No longer will the government appoint The government has extended the su-
present net asset value (NAV). perannuation age of IPO-bound LIC
the auditor, but it will be the share-
"We will invite bids for appointment of holders at the Annual General Meet- Chairman to up to 62 years by making
merchant bankers in the next couple ing, according to LIC observers. amendment to the Life Insurance Cor-
of weeks," the official said, adding dis- poration of India (Staff) Regulations,
Under the new process, LIC's Audit 1960.
cussions are going on with institutional
Committee will recommend to the
investors. The changes made in the rules will be
board for adoption a policy for selec-
"We are hoping to get regulatory ap- tion of auditors. On the Board adopt- called the Life Insurance Corporation of
provals by November-end," the official ing this policy, the Audit Committee India (Staff) Amendment Rules, 2021,
said. Up to 10 per cent of the LIC IPO will draw up a panel of auditors and according to a government notification
issue size would be reserved for poli- recommend to the board an individual dated June 30, 2021.
cyholders. or a firm for appointment. The board It is to be noted that the retirement

The Insurance Times, August 2021 9