Draw up plan to cut holdings in cos to 10%, Irda tells LIC
Press Trust Of India / Mumbai May 11, 2009, 00:23 IST
The Insurance Regulatory and Development Authority (Irda) has directed insurance behemoth Life Insurance Corporation (LIC) of India to chalk out a plan to reduce its stake in companies where it holds more than 10 per cent.
The regulator was expecting a response in 15-20 days, R Kannan, Irda member (Actuary), said.
Last year, Irda had said that the public sector insurer should pare down its holdings in companies to the prescribed limit of 10 per cent. “Now, when it (LIC) is closing its accounts, it should come out with a clear strategy for bringing its holding down (to 10 per cent). We expect LIC to come out with its plan in the next 15-20 days,” Kannan said.
Despite Irda’s directive, LIC has only marginally decreased its stake in a few Sensex-listed companies where it holds more than a 10 per cent stake in the last two quarters of the previous financial year.
IRDA never speaks against pvt. companies. Instead of trying such restrictions IRDA should concentrate on ways and means for reducing the losses of pvt. companies. The only profitable SBI life has turned into the red this year. How these companies are going to pay the maturity claims. I wonder what steps IRDA has taken in this regard.
It is rediculas .. does it mean that the lic's fund managers are incompetent? why IRDA is after LIC ? LIC suffered from solvency margine concept from 2000-2008.LIC has the sovereign guaranteed still IRDA asked lic to contribute towards solvency margine for all the policies inforced since 1956.Why IRDA does not think of its existence ? now another issue !!!!!!!!!!!! IRDA is regulatory authority or it is its bhaigiri ...
This is the stupidiest thing. Why stopping an Indian firm to reduce the stake??? Today only FIIs buy stocks and sell whenever they want to. FIIs and other operators sell the stocks whenever they need money... leaving Indian Retail investors poor by 50-80% of their portfolio value. What do SEBI, IRDA, or Govt of India do that time??
I also understand that IRDA don't want one company to have stake of more than 15%...but what about pledging of the shares by those company promoters?? And if LIC buys more stake, they won;t run away fm market. If there is more stake with an indian firm, then ultimately indian policy holders will be the owners of the firm...not someone from USA or UK or Dubai,
I must say that is still acceptable to have lot of stake in a single Indian firm that letting it being sold off to a foreign institution!!!
Posted by: birendraxalxo
May 12 , 2009, 02:29 IST
very good comment mr. atul . i think IRDA is practicing the the bhaigiri ....The IRDA came with idea of solvency margine against all the policies inforced since 1956 ignoring the sovereign guarantee... LIC completed the same between 2000-2008 which resulted in reduction in bonus rate and FAB .LIC incresed the FAB from 1850 to 2600 per thousand for the fy 2008-09 .now IRDA is questioning the ability of the fund managers.Govt does not allow lic to invest in foreign nation now IRDA is placing another restriction.......
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