In addition to appointing general managers and directors, the BBB had recommended the names of Inderjeet Singh and Suchita Gupta for the position of chairman and MD position at United India Insurance and National Insurance respectively this year. Earlier, Anjan Dey was chosen to head the Oriental Insurance Company. The bureau had also recommended Siddharth Mohanty, Mini Ipe and B C Patnaik as MDs in LIC.
Earlier this month, the Delhi HC, in response to a writ petition filed by National Insurance general manager Ravi, said that appointments made pursuant to that of directors challenged in the writ petition are liable to be set aside. “Liberty is with the respondent No.1 to make selection and appointments of general manager/directors in accordance with law,” the order said.
In January 2020, the boards of the three non-life companies had approved a proposal to merge. However, following the outbreak of the Covid pandemic, the merger process was put on hold. But in the Budget speech for FY22, finance minister Nirmala Sitharaman said that the government would move ahead with the privatisation of two public sector banks and one general insurance company in FY22.
Meanwhile, with their finances in a precarious position, the three non-life companies have been shutting offices to cut costs. All three companies have seen their solvency ratios — the insurance industry equivalent of capital adequacy ratio for banks — shrink below the mandated level. The companies can continue doing business because of government ownership.
Senior officials in the industry feel that, given the state of finances and liabilities, it is unlikely that the government would be able to privatise any company. A merged entity too would not be strong. The only feasible option might be to transfer the operations to New India Assurance.
