Govt to soon decide on giving additional charge of New India Assurance CMD

Banks Board Bureau, the headhunter for state-owned banks and financial institutions, is the advisory body formed by the government in 2016 for selection of candidates for top-level board appointments

The government will soon decide on giving additional charge of the post of chairman cum managing director (CMD) of state-owned New India Assurance as the term of incumbent Atul Sahai comes to an end later this month.

The Banks Board Bureau (BBB) has not started the process for selection of the head of the country's largest public sector general insurance firm as the Delhi High Court had observed that the Bureau is not a competent body in this case.

The court held that circulars enabling BBB to select the GM and directors of government-owned general insurers are not legally valid. The next hearing on the matter is scheduled for March 21.

BBB, the headhunter for state-owned banks and financial institutions, is the advisory body formed by the government in 2016 for selection of candidates for top-level board appointments.

In absence of direction from the high court, the additional charge for New India Assurance would be given to someone effective March 1 as regular appointment would take some time, sources said.

The finance ministry had proposed to give additional charge to Oriental Insurance Chairman Anjan Dey till the appointment of a new CMD of the Mumbai-based New India Assurance, sources said.

However, the sources added, insurance sector regulator IRDAI has sought clarification from the government on the proposal of giving additional charge to Dey, citing some provisions of the Companies Act.

The Insurance Regulatory and Development Authority of India (IRDAI) also pointed out that New India Assurance is a listed entity on the stock exchanges and has to follow all listing norms, sources said.

New India Assurance had reported a net profit of Rs 1,605 crore in 2020-21.

It is to be noted that the insurance sector regulator is headless for more than 8 months now.

The government had in the Union Budget 2021-22 announced its intent to take up one general insurance company and two public sector banks for privatisation.

To facilitate this, it has also notified the General Insurance Business (Nationalisation) Amendment Act 2021, which allows the government to cut its stake in state-owned general insurers to below 51 per cent.