Centre scraps LIC chairman post, to have managing director and CEO

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Life Insurance Corporation Of India (LIC) will now have the post of chief executive officer (CEO) and managing director instead of the chairman’s post as the government made changes to relevant rules ahead of the insurer’s initial public offering this fiscal, according to a report in Business Standard.

The relevant changes were made by the Department of Financial Services under the finance ministry by amending Life Insurance Corporation of India (Employees) Pension (Amendment) Rules. Besides, some other rules under LIC Act, 1956, have been amended.

“Chief Executive and Managing Director mean the Chief Executive Officer and Managing Director appointed by the Central Government under section 4 of the Act (LIC Act 1956),” according to a gazette notification issued on July 7.

To ensure smooth facilitation of the insurance behemoth’s IPO, the government has already approved raising its authorised share capital of Rs 25 000 crore.

Business Standard also reported that the Department of Economic Affairs under the finance ministry had recently amended the Securities Contracts (Regulation) Rules.

Companies that have a market capitalisation of more than Rs 1 lakh crore at the time of listing can now sell just 5% of their shares, a move that will be beneficial for the government during the LIC initial public offer.

Such entities will be required to increase their public shareholding to 10% in two years and raise the same to at least 25% within five years.