New India Assurance chairman suspended for irregularities

The government on Tuesday suspended New India Assurance Chairman M Ramadoss on charges of irregularities in the distribution of credit insurance cover to Paramount Airways during his tenure as chairman and managing director of Oriental Insurance Company.

“New India Assurance chairman has been placed under suspension on account of proceedings against him. United India Insurance head G Srinivasan would take additional charge of New India Assurance for the time being,” a senior government official told Business Standard.

The Central Bureau of Investigation (CBI) had recently filed a report against Ramadoss on allegations of favouring the Chennai-based low-cost airline by giving it credit-based insurance policies without following procedures. A case is also pending against Ramadoss in the Central Vigilance Commission on account of disciplinary proceedings, according to people familiar with the development.

When contacted, a senior official at the Insurance Regulatory and Development Authority confirmed the development. “We are aware of the issue and finance ministry officials consulted us before appointing the temporary chairman at New India Assurance,” the official said.

Despite repeated attempts, Ramadoss could not be reached for a comment.

“It is a government order. Hopefully, everything would be sorted out quickly, but it will not affect day-to-day business,” said a New India official.

This is the second time that the head of a public sector insurance company has come under government scanner. In May, T S Vijayan, the then-chairman of Life Insurance Corporation of India, the largest life insurer in the country, was denied an extension after some of his investment decisions came under the scrutiny of the CBI.