The race for the post of the chairman of Insurance Regulatory Development Authority (IRDA) may not be a done deal yet. The Central Vigilance Commission (CVC), it seems, is frowning at the proposal to appoint T S Vijayan, former chairman of the Life Insurance Corporation of India (LIC), according to sources familiar with the development.
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And even if he passes muster with the CVC, there is another obstacle to surmount — the Appointments Committee of the Cabinet, which gives the final clearance, one person said.
As a result, names of two more contenders have emerged, another source said: Kamalji Sahay, former chief of Star Union Dai-ichi Life, and a former executive director of LIC; and Girish Chandra Chaturvedi, petroleum secretary, who retires this month.
The term of J Hari Narayan, the current IRDA chief, ends in February.
The buzz is finance minister P Chidambaram may be inclined towards appointing an industry professional to lead the regulator, rather than a bureaucrat.
The contribution of the insurance industry to India’s GDP has fallen significantly – by 100 basis points – to 4.1%, in 2011-12 from the fiscal before. As much as 99.3% of this comes from life insurance premiums. That tantamounts to a loss of about `2 lakh crore in long-term money mobilisation for the government, which could have gone towards development of infrastructure.
When India’s insurance industry was thrown open at the turn of the millennium, its contribution stood at 2.9% of GDP, which rose to as much as 5.1% in March 2011.
Too many regulatory interventions, zero product approvals, unit-linked plans not finding favour with insurers due to stricter rules, and pension mobilisations tapering to a trickle were cited as the reasons for the decline.
All that could strengthen the case of Sahay, who took Star Union Daiichi, which was the 22nd entity to get a licence and started business in 2009, to the 11th spot by March 2012 – just 3 years – ahead of more illustrious rivals.
Chaturvedi is being considered because he has the experience of working many years in the finance ministry, when he was the special secretary, financial services.
Though he retires this month-end, and is replaced by Vivek Rae, secretary, ministry of micro and SMEs, he remains eligible according to the terms of selection.
The problem for CVC is the Central Bureau of Investigation (CBI) probe into the LIC Housing Finance cash-for-loan scam in November 2010 which led to the unprecedented demotion of Vijayan from chairman to executive director of LIC in May 2011.
To be sure, the CBI later cleared Vijayan of all corruption charges and he retired as managing director in November last.
DK Mehrotra, the current LIC chairman, retires in May, as would managing director Thomas Mathew.
In all, 9 candidates were interviewed for the position of IRDA chairman on December 27 in North Block with finance secretary D K Mittal chairing the process, assisted by Arvind Mayaram, the economic affairs secretary, P K Mishra, secretary, administrative reforms and pensions, O P Bhatt, former chairman of the State Bank of India, and Debashis Chatterjee, director, Indian Institute of Management, Kozhikode.
http://www.dnaindia.com/money/report_irda-chief-race-opens-up-anew_1792423
