By all counts, the successor to SK Roy, who has unexpectedly tendered his resignation as LIC Chairman, may come from within the State-run life insurance behemoth itself.

Tradition has it that most of those who were appointed LIC chairmen had come from within the life insurer, said several LIC watchers and insurance experts.

Indications are that this time too the task of identifying the next chairman will rest with the committee appointed by the Department of Financial Services (DFS). The panel will recommend names for the Appointments Committee of Cabinet (ACC) to take a final call. Roy, who has been with LIC since 1981, took charge as chairman in June 2013. Roy had become Managing Director on May 31, 2013.

Official sources said that the DFS is likely to start the process of finding a successor to Roy only after ACC gives approval for this purpose. The ACC is yet to accept Roy’s resignation, which came two years ahead of completion of his five year-term.

Legal provisions

Also, the Modi-led government has to factor in the legal provisions around existing insurance laws and the Life Insurance Act before trying some innovative steps like bringing in any private sector person to lead the behemoth.

In the case of the banking sector, the government had walked the extra mile to bring in private sector hands to run some public sector banks.

The jury is still out on whether it was a good move or not, especially with banks now facing huge non-performing loans, following the RBI’s asset quality review. LIC, being the dominant player in the life insurance industry, has often supported the government whenever the latter’s equity stake sales did not find enough takers.

That LIC, as the country’s largest institutional investor, has never disappointed the government is quite well known in investment circles.

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