INSUBCONTINENT EXCLUSIVE:
It is high time Life Insurance Corporation of India (LIC) came out from purdah and joined its peers on the promenade, taking in public
scrutiny as to its being and deportment
policyholders, whether at the behest of political masters or not
It must face the same regulatory discipline as other insurance companies, achieve at least the same levels of reporting transparency and
A recent analysis by ET Intelligence Group showed that LIC picked up shares in a clutch of small companies at elevated prices in a downward
trending market, deviating from its broad strategy of investing only in BSE 200 companies, raising questions on the kind of decision-making
at LIC.
LIC must steer clear of any allegation of mala fide in its investment decisions
This, in turn, calls for robust supervision, with systems in place to mitigate operational risks
LIC should generate decent returns for its shareholders from investments
Possessing assets under management worth Rs 28 lakh crore as of March 2018, it is possible to increase returns and mitigate risk by
investing across diverse asset classes, including in venture funds and private equity
The need is to do this with integrity, and incentivise efficiency and integrity in asset managers by tailoring their compensation to align
discourage any front running
short-term performance and even more liberal payouts linked to long-term performance, subject to clawback, would make sense
Bankers have used the market for derivatives to cash out rich on such delayed compensation instruments
If the market functions well, the risk premium in the pricing should discourage such shortcuts.
