Transparency of LIC

Sir, - This refers to the rejoinder of Mr. Faruqi, Executive Director (PR), LIC of India (TheHindu, May 8) to my article of May 2. His letter only reinforces my point that LIC is not willing to be transparent. He says that there is no concept of profits but only valuation surplus. Then follows some jargonising which is typical of LIC. But he has not denied my statement that LIC is paying more than Rs. 1,000 crores every year as income-tax nor has he come forward to state on what basis the income-tax is arrived at when there is no concept of profit.

His second point that the coverage is not 7 per cent as mentioned (7 crore) but 12 crore lives taking into account group insurance schemes. This 7 per cent is Finance Ministry's figure at the time of last year's budget. If they have improved, it is welcome. But to claim that this represents 25 per cent of the insurable population is again a dubious claim since it has not been stated how one draws the line for this so-called insurable population. If LIC makes a cut on its profits, keeps the premium low enough, more people can be given the facility of life insurance is the thrust of the article.

Although he has denied my statement that LIC makes a neat packet on account of lapsed policies, he admits to creation of surplus on account of lapsed policies and also admits to distributing them. Making vague and general statements is LIC's cup of tea. A dig into the 41st annual report 1997-98 shows on page 71 that the number of policies forfeited (i.e. that is lapsed without acquiring paid-up value) is 26 lakhs. And the monies gained by this are Rs. 9,923 crores. If this is not a neat packet, what else is it?

While reacting to my statement that LIC is the single largest sued-against organisation in consumer fora and commissions, he says LIC's success record in litigation is not as bad as it is made out to be. The point I made was only with reference to consumer fora where the LIC victims now flock. I wish he had given the figures of how many cases have been filed against LIC all over the country in consumer fora and commissions and in how many cases, LIC's stand has been vindicated. None of these figures is available in the annual report.

His reply only strengthens my earlier demand that the true picture of the LIC of India will emerge only when an independent social audit is ordered and the figures asked for are published in an easy-to-access manner.

S. Pushpavanam,

Secretary, Consumer Protection

Council, Tamil Nadu, Tiruchi

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