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Debashis Basu: Exploiting life insurance users

It is the nature of insurance products, how they are sold and the government's lock on LIC for such patriotic duties as rescuing badly-planned share sales

Debashis Basu

On 24 August, as the global markets were crashing all around us, the Sensex had plummetted about 1700 points at one time. Once again, the Life Insurance Corporation of India (LIC) stepped in to rescue one more share-sale plan of the Government of India. Media reports say that almost 86 per cent of the Rs 9300 crore raised from the government's stake sale in Indian Oil Corporation (IOC) that day came from the LIC. This one small event says a lot about a dark corner of the financial services industry that 23 years of slow liberalisation has not touched at all. It is the nature of insurance ...