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Chennai, Jan 16 (IANS) The government should choose people with intricate knowledge of the insurance industry to revamp the vigilance departments in six state-run companies in the sector, say experts.
The Department of Financial Services (DFS) in the finance ministry earlier this month issued an office memorandum inviting nominations for appointment on deputation to the posts of chief vigilance officers (CVO) in six public sector insurance companies - Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd, New India Assurance Company Ltd, Oriental Insurance Company Ltd and United India Insurance Company Ltd.
According to the memorandum, the post of CVO in the six insurance companies is in the rank of director/deputy secretary. Officers in the rank of general manager in public sector banks/financial institutions and executive director in LIC are also eligible for the post.
"It seems the government is looking at people from other institutions or even its own officers to be appointed as CVOs in the insurance companies," J. Gurumurthy, secretary, All India Insurance Employees Association (AIIEA), told IANS.
"Recently there has been a spate of reported cases involving high profile officers (of LIC Housing Finance, LIC and Oriental Insurance Company) of the insurance industry. There is thus perhaps a felt need to revamp the vigilance setup in public sector insurance companies," K.K.Srinivasan, former member of Insurance Regulatory and Development Authority (IRDA) told IANS.
According to Srinivasan, the previous practice was to appoint an officer from a public sector general insurance company as CVO in LIC and appoint an officer from LIC as CVO in a government owned non-life insurer.
He said in the past the appointed officers were of the rank executive director (of LIC) and general managers (of general insurance companies). However, in the recent past this has been scaled down to the rank of deputy general managers or equivalent and CVOs in government non-life insurance companies are drawn from each other or from GIC.
"In revamping the vigilance system or selection of CVOs in insurance companies, one important aspect has to be kept in mind. While, In general insurance the dominant corruption opportunities are in claims, in life insurance the dominant corruption opportunities are in investment. Hence intricate knowledge of these areas in insurance is essential for vigilance mechanism to be effective," Srinivasan said.