Irdai says 'yet to get' proposal from LIC on IPO

Mumbai: Insurance watchdog Irdai is yet to get any proposal from life insurance behemoth LIC on an initial public offering but feels a listing is better from a governance perspective, chairman S C Khuntia said on Tuesday.

He also said that there is nothing for the life insurance industry to worry for the time being with regard to government's move on certain income tax exemptions as the alternative to invest still exists.

Khuntia also asked insurance companies to "weed out" loss-making products and concentrate only on the better paying ones.

On the IPO of Life Insurance Corporation of India announced in the budget, he said, "LIC proposal has not yet come".

"Any company which goes public there will be better corporate governance and better disclosure, he told reporters on the sidelines of an event of actuaries here.

On being asked if LIC's business will need any restructuring before IPO, Khuntia said that work on the same is being carried out by the government.

He said it is a good idea for every insurance company to list and the Insurance Regulation and Development Authority of India (Irdai) will nudge entities to go for the same.

It is, however, not making it mandatory to list because smaller companies are yet to achieve the scale for going public, Khuntia said, adding that ideally a company should achieve sufficient scale to list within ten years of its existence.

He said the practice of annual product review needs to be carried out in full seriousness by the players and pitched for a weeding out of the loss making ones.