The Hindu Business Line : IA to have more freedom to choose insurer

IN an effort to provide greater freedom to the state-owned carrier, Indian Airlines (IA), to choose with whom it should insure its aircraft, the Government has proposed that its earlier guidelines be withdrawn.

Official sources told Business Line that the earlier guidelines tended to create a "monopoly" situation in which only one insurance company was found suitable for the job.

Sources indicated that the Chief Executive Officers (CEOs) of several public sector companies had petitioned the Government on the issue saying that it did not make much sense for them to make presentations as the laid down guidelines favoured only one party.

"The Government has suggested that insurance of aircraft of IA be given by rotation to each of the public sector insurance companies. After all, what is the necessity of a company, which is making a pitch for the account, to have a very high stipulated net worth when 95 per cent of the insurance of the aircraft is any way reinsured with some other company," sources said. The IA board which is scheduled to meet here on Wednesday, is expected to take up the insurance issue.

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