Life Insurance Corporation of India (LIC) is treated like any other company, the country’s biggest life insurer said on April 4, dismissing the United States Trade Representative’s (USTR) claims of preferential treatment by the government.
USTR recently suggested that the government was offering preferential treatment to the state-run insurer.
“LIC is treated like any other insurance company by the government and Regulators,” LIC said.
Chief executive officer (CEO) and managing director Siddhartha Mohanty said USTR’s views stemmed from “an incomplete understanding of Indian insurance regulation and LIC’s functioning”.
There was a need for a “more balanced and factual appreciation” of the corporation’s contribution to financial inclusion and policyholder protection in India, he said.
LIC said it operates on a level playing field and has not received any undue advantage from the government or regulatory bodies.
The sovereign guarantee provided to LIC at the time of its nationalisation in 1956 is meant to instil public trust in a newly established national insurer and has never been invoked or marketed as a special benefit, the statement said.
“LIC’s leadership in the insurance sector is entirely due to the trust of its policyholders, its commitment to service excellence, and its financial strength and transparency,” it added.
The clarification comes after a report by the Office of the USTR said India maintained an uneven playing field in the insurance sector.
State-owned insurers were subjected to the same law and supervision as private players and enjoyed various guarantees from the government, it claimed.
The government maintains an explicit sovereign guarantee on every LIC policy, which results in many customers preferring the insurer over private players, giving the state-owned company an unfair competitive advantage, it said.
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