New Delhi (NVI): The All India LIC Employees Federation (AILEF) has expressed concern over the Central Government’s plan for disinvestment in Life Insurance Corporation of India, the country’s largest life insurer.
The body has written a letter to Prime Minister Narendra Modi while seeking his intervention to “immediately stop disinvestment in LIC.” They have claimed that disinvestment in LIC will go against the policy of Aatmanirbhar Bharat.
In its letter to PM, AILEF has cited news appearing in the national media on the government’s decision to set in motion the proposal for disinvestment in LIC. “It is being reported that the Department of Investment and Public Asset Management (DIPAM) has invited bids from consulting firms, investment bankers and financial institution to advise the government on the preparatory processes of the proposed IPO,” the letter dated June 26 reads.
The government will be engaging two pre-IPO transaction advisors for the largest public offer in the country till now. The last date for bids for advisors to LIC’s IPO is July 13, as per the request for proposal, whereas the bids will be opened on July 14.
“If the government goes ahead with its plan of disinvestment in LIC there will be implication for policyholders. As per the Sec 28 of LIC Act, 1956 policyholders are eligible for not less than 95% of the surplus emerging under both participating and non-participating policies. The proposed public offer through disinvestment in LIC will change the way surplus is distributed. Higher share of surplus to shareholders will affect the rate of bonus to policyholders and this in turn will affect future new business,” AILEF General Secretary Rajesh Kumar says in the letter.
Listing of LIC will also change LIC’s operational approach and investment policies, the letter further read. The LIC Employees Federation has made a fervent appeal to the PM to rescind the decision of disinvesting in LIC in national interest saying that it will “give a big boost to make India Aatmanirbhar.”
“Disinvestment in LIC will be a stepping stone for privatisation in future which will be against the national interest,” the letter read.