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LIC to pump Rs 300 billion into economy to boost investment climate

Life Insurance Corporation of India will invest Rs 300 billion to boost industry and improve the investment climate in the insurance sector.

General Insurance Company will invest an additional Rs 8-9 billion for the same purpose, special secretary (insurance) B K Chaturvedi said in New Delhi today.

LIC will invest 50 per cent of the Rs 300 billion in government treasury bills and the rest in housing, infrastructure and social infrastructure programmes, Chaturvedi said while addressing a meeting organised by the Punjab, Haryana and Delhi Chambers of Commerce and Industry.

He said the assets of LIC have increased by nearly Rs 70 billion. With this growth of investment, it is now providing support to industry and is also an equity participant in many companies, said Chaturvedi.

Regarding the state of the Insurance Regulatory Authority Bill, Chaturvedi said that they will have an opportunity to reintroduce the bill when the new Parliament is convened.

He said the response of foreign players is reasonable and satisfactory as the opening up of the insurance sector will start the process of competition to provide better financial resources, customer services and wider choice of policies.

Meantime, the IRA is helping in spade work as to what rules it will have to abide by when the bill gets passed, he disclosed.

The insurance sector has a major presence in the stock market. Its assets in the market today stand at Rs 1.27 trillion. Since the insurance sector would like to accumulate assets, insurance companies are net buyers in the stock market. In turn, the stocks of insurance companies go up.

Insurance companies' finances are expected to increase substantially when the pension funds expand and this will help the industry substantially, said Chaturvedi.

UNI

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