CAG flags deficiencies in mgmt of postal insurance funds

Government auditor CAG has flagged “deficiencies” in management of postal life insurance (PLI) and Rural PLI funds, including incorrect assessment of investable assets and delay in investment, saying it resulted in loss of potential return worth Rs 984 crore.

In its report tabled in Parliament on Tuesday, CAG said management of fund of PLI and RPLI “suffered from deficiencies like incorrect assessment of investable funds on daily net accretion basis and also monthly investable fund basis”.

“The delay in investment resulted in loss of potential return to the tune of Rs 984 crore,” it added. Also, delay in reinvestment of returns from Government of India Special Security Floating rate Bond, non-adherence to Insurance Regulatory and Development Authority (Investment) Regulations and instances of non-availing of Cenvat credit were also noticed, it said. 

PLI and RPLI schemes form part of public account and are operated through Post Office Life Insurance Fund (POLIF) and Rural POLIF, respectively. The report said “the audit of Management of Investment of Insurance Fund of PLI and RPLI was conducted during January and February 2016 covering the period from 2009-10 to 2014-15.

Eleven postal circles, comprising of 56 head post offices were selected for scrutiny.” 

CAG further said, “Audit was conducted with the objective that the Insurance funds were effectively and efficiently collected, accounted and invested as per applicable rules and regulations.