The thirteenth state conference of Life Insurance Corporation Agents Organisation of India (LICAOI), West Bengal, was held on September 21-22 at Taki in North 24 Parganas district with a resolve to transform the united movement of all agents, employees, and policyholders into a mass movement to “save LIC”. All India president of the organisation, Basudeb Acharya was present at the conference.

The voices of various delegates of the conference, like Shubra Pal of Sodpur, Sultana Khatun of Airmari village in Murshidabad district, and Kanika Majumdar of Behala, echoed that the organisation must be strengthened at any cost. 

Basudeb Acharya said in the public rally at the ground of the Taki Biblabri Sangh at the beginning of the conference that, “The Central government’s policy of killing people has started to weaken the LIC. We have to take up the challenge of saving LIC. Forty-two crore people in the country are policyholders. We have to save our country. The danger is not only for LIC; we are all in danger.”

Centre of Indian Trade Unions (CITU) state secretary Anadi Sahu said that the BJP is ruling the country in the same manner as British-ruled India. “The politics of division is pushing the country to destruction and privatising state-owned enterprises. The unemployment rate is growing. Workers’ safety is decreasing. No social security. Working hours are increasing. The new labour code law must be stopped. If not, the lives of the workers will be in dire danger.”

On the second day of the conference on Thursday, delegates were divided into three groups to discuss the report and discuss the commission’s paper and exchange views. Sushant Samaddar addressed the topic of ‘Life Insurance Corporation, Changed Situation, Responsibilities and Duties of Agents’.

Ishita Mukherjee discussed the ‘Cancel LIC Privatisation Plot’, while Anvika Ganguly discussed the topic of ‘The historical role of women since the dawn of civilisation.’

From the conference, ten resolution was raised, including against LIC disinvestment, saving nationalised industries and saving the country’s economy, cancelling the four labour codes, ensuring social security of LIC agents, full status for women in all fields to build a better society, for better business and better organising, against communalism and separatism, against corruption, fraud and looting, against price hike, protection of the environment for better livelihood, etc.

Two hundred seventy-five delegates from 8 divisions attended the conference. In the discussion, delegates said that there was no alternative but to fight fiercely by taking responsibility from past experience and standing on the ground of reality. The conference resolved to regularly publish the organisation’s mouthpiece ‘Jiwan Barta’, and hold education camps.

CITU North 24 Parganas district secretary Gargi Chatterjee, former MP Nepaldeb Bhattacharya, and the zonal secretary of the organisation, Manoranjan Sarkar, gave congratulatory speeches.

Courtesy: Newsclick

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The value of its holdings has been reduced to Rs. 4.86 trillion from Rs. 5.43 trillion in the June quarter. This translated into a mark-to-market hit of more than Rs. 57,000 crore or 10.5 percent. This analysis has been reached after looking at the 336 listed companies, where LIC’s stake has been disclosed for the June quarter.

So far in this quarter, the market benchmark Sensex — which consists of 30 blue-chip stocks — has corrected 5.1 per cent. Meanwhile, broader market indices — BSE Midcap and BSE Smallcap — have corrected 7.7 per cent and 8.6 per cent, respectively.

The market sell-off was aggravated with foreign institutional investors (FIIs) selling Rs 31,870 crore worth of equities since the tax surcharge announcement in July. LIC is known for its ability to hold onto its investments for much longer periods and also for raising the bets when markets are weak.

G Chokkalingam, founder of Equinomics said, “PSU companies have been among biggest underperformers. Apart from the bluechips, sell-off in PSU banks and non-banking PSUs in mid-cap space must have put pressure on LIC’s investments”.

The BSE PSU Index is down 15 per cent during the quarter.

Analysts say that the PSU names have also been under pressure due to constant selling by the government to raise funds through its divestment drive.

According to the data, value of LIC’s stake in PSU names has declined by Rs 22,676 crore in the current quarter, which is 40 per cent of the overall erosion.

Analysts believe PSU bank mergers are also a cause of concern for the life insurer’s portfolio.

Analysts at JM Financial said in a note, “In the near-term, as these banks go through the merger process, a significant proportion of management and employee bandwidth is likely to get consumed and diverted away from growth and resolutions. There could be a drag on overall environment (these banks form 23 per cent of overall credit of the banking system.”

LIC holds stake in all the four PSU banks that have been shortlisted as banks that would be absorbing smaller banks as part of the mergers.

LIC held 7.3 per cent stake in Punjab National Bank as of June quarter. It held 9.2 per cent stake in Canara Bank, 6.4 per cent stake in Union Bank and 1.85 per cent stake in Indian Bank.

One reader in the Business Standard magazine responded to this development by saying, “The governments in the 21st century in India discovered a new way to finance their fiscal deficits, that is, using the Life Insurance Corporation of India (LIC) to invest, switch, buy, rescue and act as white knight with respect to the government’s ambitious disinvestment targets and saving IDBI Bank from going kaput. The funds available to the LIC are not ‘sovereign funds’ but hard earned savings of the people of India. Even sovereign funds like Temasek of Singapore do not conduct their financial dealings as unprofessionally and as irresponsibly as has been done by the LIC in the last couple of year”.

Although ‘LIC’ has become synonymous with ‘life insurance’, the people know very little about LIC as a business enterprise: How it does business and what the results are. LIC was the result of nationalisation and subsequent amalgamation of numerous life insurance companies in 1956. This nationalisation was sought to be justified by ‘policyholder interest’. As in bank nationalisation, the stated objective was a smokescreen to hide the government’s real intent which was to gain control over the enormous funds that insurers generate and thus enjoy unparalleled access to and control over the financial markets.

In 2017, LIC reported a premium income of Rs 300,000 crores. Its investment income alone was Rs 164,000 crores. It serviced 25 crore (250 million) policy-holders and 30 crore (300 million) policies. It employs lakhs of agents for whom selling insurance policies is the sole source of income.

In July, 2018 it decided that it will buy 30 percent of IDBI, a move that was sure to make use of ‘policyholders’ funds. It was not the government’s or LIC’s money to play poker with, even if it is a sure shot. The investment didn’t come out of what is called ‘shareholders funds’, or funds that belong to the ‘owners’ of the company, in this case the government.

LIC’s 254 page annual report for 2017 shows in excruciating details how they have been toeing the government line, but not how much ‘owners’ money is invested in it.

Many such similar moves have brought the company to where it is right now.

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