Financial Daily from THE HINDU group of publications
Wednesday, Jul 17, 2002

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Opinion - Letters

LIC loans

It is rather unfortunate that `LIC scuppers States' bid to buy back high-cost loans' (Business Line, July15). The reasons — that there is no early exit option or that it would shrink the earnings, resulting in a possible hike in premia for new policies — do not appear to be sound.

These may only temporarily affect the bonus of the policyholders to the extent of the present trend of returns and inflation rate. At the same time, assistance to the States facing financial difficulties would indirectly help the people and the insurance business. Why does the Life Insurance Corporation of India (LIC) not consider the request of the States favourably?

A. Jacob Sahayam


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