Unfazed by controversy surrounding its housing finance arm, country’s largest insurer Life Insurance Corporation (LIC) plans to pump in about Rs 61,000 cr in the equity market during this fiscal.
“This year we are likely to invest around Rs Rs 61,000 cr (in equity market),” LIC Managing Director Thomas Mathew told.
Increase in exposure to equity market secondary or primary market would depend on market condition, he said.
“We hold shares for long term. Whether it’s down or up it’s opportunity for us,” he said.
“Now it’s (market) up so we have booked profit. Already this year we have made good profits. Last year, total profit by churning portfolio was Rs 9,400 cr full year,” he said.
However, during this year till mid-October LIC has earned Rs 12,000 cr by churning portfolio, he added.
During the first seven months (April-October period) of the current fiscal, LIC has breached the Rs 50,000-cr mark.
LIC’s new premium stood at Rs 50,605 cr compared to Rs 30,469 cr during the same period last year, registering an increase of 66 per cent.
Overall, the life insurance industry mopped up new premium of Rs 69,706 cr during April-October this year, up from Rs 46,689 cr in the corresponding period last fiscal.
The 22 private life insurers have collected Rs 19,099 cr in the first seven months of 2010-11, up from Rs 16,217 cr in the same period last fiscal.
Last week, LIC played down Rs 14,000 cr deficit in three of its schemes, saying that the gap is notional and it had a surplus of Rs 24,000 cr in the previous fiscal.
“Last year, our surplus was Rs 24,000 cr. It (Rs 14,000 cr) is a notional and acturial deficit in particular schemes. Overall, we are very strong,” LIC Chairman T S Vijayan had said.
The Insurance Regulatory and Development Authority (IRDA) had earlier launched a probe to ascertain whether LIC had violated rules by transferring profits of one scheme to another to cover up the losses in some of its funds.
State-owned Life Insurance Corporation (LIC) manages assets worth over Rs 12 lakh cr.
IRDA was investigating the books of LIC for 2009-10 and initial inspection revealed that there was a valuation deficit of around Rs 14,000 cr in three plans of its guaranteed- return annuity policies — Jeevan Dhara, Jeevan Suraksha and Jeevan Akshay.
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