It has also appointed A K Shukla and K Shridhar as managing directors. With these appointments, LIC once again has a full board after the retirement of chairman S B Mathur and managing director R K Vashishtha a couple of months back.

The government has not taken any decision yet on appointing a third managing director despite demand from the corporation. The appointment is a move away from the usual practice of electing personnel having more than two years residual service.

Bhardwaj takes charge as chairman from December 9, and will retire on May 31, 2005.

The two managing directors do not have over two years of service. Shukla, formerly executive director, will retire in April 2006 and Shridhar, chief vigilance officer on deputation at the New India Assurance Company and General Insurance Corporation of India will complete his service at LIC in mid-2006.

The government was faced with a choice of appointing individuals having less than two years residual service or those having less than one year's experience as executive directors, but at least seven years residual service.

This was because for eight years LIC had not recruited any individual, thereby leaving a huge gap of seven to eight years between two recruitment batches.

Speaking on the immediate challenges facing the corporation, the newly appointed top brass said that the first step would be to favourably complete the wage negotiation of the 115,000 employees.

"Harmonising the employees and agency force will help the corporation regain market share," said one of the top brass.

The most important challenge facing LIC's top brass would be to regain market share, and harmonise relations with employees and agents.

There has been agitation by development officers following the change in calculation of their earnings by the management.

The rise in interest rates will be a boon for the corporation, helping it sustain last year's bonus rates. However, the management acknowledges the need to look at hedging volatility in interest rates.

Shukla said another key challenge would be the introduction of new products, especially unit-linked plans, to meet competition. "We need to popularise the product as the market has picked it up well," he added.

LIC is awaiting approval from the Insurance Regulatory and Development Authority for its two new unit-linked plans.