Over time, the Life Insurance Corporation of India (LIC) has become the investor of last resort in failing and flailing bank and non-bank finance companies. Investors in LIC's insurance and other schemes are receiving a lower rate of return because LIC is subsidising incompetence at best and malfeasance at worst in institutions such as IDBI Bank and Infrastructure Leasing and Financial Services (IL&FS). LIC is fully owned by the Government of India and is regulated by the Insurance Regulatory and Development Authority (IRDAI). IRDAI's mission is to "protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry". LIC's foremost priority has to be providing efficient services and high returns to existing policyholders and to widen its reach. By contrast, government is pushing LIC into taking unwarranted risks and IRDAI has been complicit.
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First Published: Thu, September 27 2018. 00:51 IST