Government raises retirement age of LIC chairman to 62 years

Government raises retirement age of LIC chairman to 62 years
Image Source: File Photo/PTI

Government raises retirement age of LIC chairman to 62 years

The government has raised the retirement age of IPO-bound LIC chairman to 62 years by amending the Life Insurance Corporation of India (Employees) Regulations, 1960. The changes made in the rules will be called Life Insurance Corporation of India. (Employees) Amendment Rules, 2021, pursuant to a government notification dated June 30, 2021.

It should be noted that the retirement age for top executives of most PSUs, including the State Bank of India (SBI), is 60 years old, barring a few exceptions.

“Notwithstanding anything contained in these rules, if the Central Government appoints the Chairperson for a term not exceeding the age of sixty years, or extends the term of his office by a period exceeding the said age, then He shall not retire until he has completed such tenure, or until he attains the age of sixty-two years, whichever is earlier,” the gazette notification said.

Last month, the government had approved a nine-month extension till March next year to LIC chairman MR Kumar in view of the insurer’s proposed initial public offer at the end of the current financial year.

In her budget speech this year, Finance Minister Nirmala Sitharaman had said that LIC’s initial public offer (IPO) will be issued in 2021-22 as part of the ambitious Rs 1.75 lakh crore disinvestment target.

The government extended Kumar’s tenure from June 30, 2021, to March 13, 2022, the date on which he would complete three years.

The government has already amended the Life Insurance Corporation Act, 1956 along with the Finance Act 2021 to facilitate the public offering. As a part of the amendment, the government increased the authorized capital of LIC from Rs 100 crore to Rs 25,000 crore to facilitate listing.

As per the amendment to the Life Insurance Corporation Act, 1956, the authorized share capital of LIC would be Rs 25,000 crore, divided into 2,500 crore shares of Rs 10 each.

The government has 100% stake in LIC. Once listed, it is likely to become the country’s largest company by market capitalization with an estimated valuation of Rs 8-10 lakh crore.

The country’s largest life insurance company has an asset base of Rs 31,96,214.81 crore.

According to provisional data, LIC collected the highest ever new business premium of Rs 1.84 lakh crore in the financial year ended March 31, 2021.

The market share of the insurer, which has over 29 crore policyholders, stood at 81.04 per cent in terms of the number of policies issued in March 2021.

Read also | LIC launches Saral Pension Scheme: Earn a minimum pension of Rs 12,000 annually; Description

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