Page 11 - Insurance Times July 2019

LIC purchases over Rs CBI nabs LIC officials for insurance fraud

8,000 cr of state bonds CBI has recently booked two officials of LIC of India for allegedly swindling more
than Rs 3 crore by making death claims on the
LIC has invested more than Rs 8,000
basis of forged documents in 190 insurance poli-
crore in state
cies in which they inserted bank accounts of their
go ve rn m e nt
acquaintances in place of nominees, officials said.
bonds. The in-
vestment has For nearly 10 years between 2008 and 2018, the
helped LIC earn scam went undetected in Kodad branch of
at least 60 basis points more than Suryapet district, Telangana. However, an internal audit by the LIC caught the
the benchmark yield for such pa- ongoing fraud, the officials added. Based on a complaint from the LIC, the Cen-
pers, sources said. tral Bureau of Investigation (CBI) registered an FIR against Banoth Beeku Naik,

Among multiple bidders, only LIC Assistant Administrative Officer and Gugulothu Harya, nine agents and some
outbid others in the competitive unidentified persons.
auction segment. LIC's investment The agents' accounts were also credited with death claims, they said. "They have
book in FY19 recorded around Rs 25 submitted fake death certificates and other documents to the LIC for process-
lakh crore. Sikkim, Kerala, Madhya ing of death claims payments under these policies," the LIC said in its complaint
Pradesh, Jammu & Kashmir,
which is now a part of the CBI FIR. The agents arrested by CBI include Palaki
Maharashtra, Rajasthan, Andhra
Raghu Chary, A Kondaiah, P Suresh, M Dhana Murthy, Toomati Surender Reddy,
Pradesh, Tamil Nadu and Punjab
Bhonagiri Vijaya Kumar, Vangala Saida Chary, Bhukya Ravi and Kalvakuntia
raised Rs 8,366 crore collectively. Rs
Venkanna.
274 crore of the entire sum was al-
"Most of the claims were processed by the above said public servants. How-
located to non-competitive or indi-
ever, in most of the cases, the policy holders are alive and death claims have
vidual bidders.
not been received by their respective nominees. The claim amounts were also
The central bank conducted the auc-
credited to the bank accounts of public servants, agents and their close rela-
tion process for these debt securities
tives," the FIR alleged.
known as State Development Loans.
Those papers are treated almost on
LIC celebrates International Yoga Day
a par with sovereign debt. The
LIC, South Central Zone, Hyderabad, celebrated International Day of Yoga to
bonds yielded about 7.6%. The buy-
propagate a healthy life through yoga.
ing corporate bonds have been re-
LIC has organised a yoga camp at
duced by the insurer after a series of
Damodaram Sanjeeviah Memorial Park.
rating downgrades for borrowers,
said sources. K Sudhakar Reddy, Executive Director
(Health Insurance), Central Office, for-
"Instead, it is focusing more on state
mally inaugurated the event. Yoga
government bonds with slipping sov-
teachers from Love Yoga Foundation
ereign bond yields," stated source.
taught yoga tips and showed the way
Since September of the previous
for a healthy life.
year, bond buyers are seeking safe
instruments after the IL&FS defaults. Regional Manager (Marketing) PVS Nagaraja Rao, S Nagesh, Chief (Health In-
surance), S Thakur, Chief Engineer, N Lalitha, Regional Manager (Corporate
The spread, or differential, between
Ccommunications), and M Ravi Kumar, Regional Manager (Health Insurance) and
the benchmark bond yield and simi-
other top officials participated in the event.
lar maturity state government papers
is now in the range of 60- 70 basis While giving his inaugural address, K Sudhakar Reddy, ED (HI), said that it was
points, compared with 85-90 bps dur- a great opportunity for LIC, being the country's largest life insurer serving close
ing Jan-March earlier this year. to 29 crore policyholders, to propagate the message of 'Healthy life through
Yoga’.
"Although secondary SDL yields are
about 10 basis points higher, LIC He made an appeal to all the participants to continue the practice of Yoga for
typically buys from the primary mar- being healthy forever. He also stressed the need of financial security in the form
ket," said another source. of health insurance in case of unforeseen health exigencies.
The Insurance Times, July 2019 11