LIC refutes claims of ‘favouritism’ by government

Mumbai: State-run Life Insurance Corp (LIC) Friday refuted US claims of ‘special treatment’ from the Indian government and regulators, concessions that Washington said helped it secure business from ordinary citizens at the expense of privately-run insurers.

In its response to ‘favouritism’ claims by the US Trade Representative (USTR), LIC also said it operates in a competitive market alongside other insurers in an industry that has witnessed phased deregulation through this millennium.

“LIC wishes to clarify that LIC is treated like any other insurance company by the government and regulators. The guarantee-provided at the time of its establishment in 1956-is a statutory provision designed to build public confidence in the early years of nationalisation,” the insurer said. “It has never been invoked or used as a marketing tool or provided any undue advantage to LIC.”

Siddhartha Mohanty, MD & CEO, said that LIC remains committed to upholding the highest standards of governance, service, and customer trust.

LIC is the country’s second most-valued state-run entity, after the State Bank of India.

The USTR report had named LIC and National Payments Corporation of India among entities receiving favourable treatment from New Delhi. It had listed a slew of entry barriers and ‘unfavourable treatment’ faced by foreign firms in India’s financial services sector like banking, insurance, digital payments, and accounting.It had claimed New Delhi provided explicit sovereign guarantee to every LIC policy.”Many customers choose to buy LIC policies over those offered by private insurers, giving LIC an unfair competitive advantage,” the report stated.

In its reply, LIC said that for the past 25 years, it has operated in a fully competitive market alongside 24 private life insurance companies.

“We firmly believe the USTR’s views are based on an incomplete understanding of Indian insurance regulation and LIC’s functioning,” said the insurer.