Life Insurance Corporation of India

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This is a collection of articles archived for the excellence of their content.


In brief

The Life Insurance Corporation with its Central Office in Mumbai, 8 Zonal Offices at Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Kanpur, Bhopal and Patna, 109 Divisional Offices including one Salary Savings Schemes (SSS) Division at Mumbai, 2048 Branch Offices and 1004 Satellite Offices as on 31 March 2010, spreads the message of Insurance through the length and breadth of India, with the help of 14,02,807 agents.

LIC also transacts business abroad. International Operations were set up with an endeavor to establish global presence and also to acquire the best practices being followed internationally so that LIC may become a world class organization. LIC's endeavour is to further consolidate their Brand Image across the world. At present LIC is operating internationally through Branch Offices in Fiji, Mauritius and UK and through Joint Venture Companies in Bahrain Nepal, Sri Lanka, Kenya and Saudi Arabia. Its Representative Office in Singapore was opened on 06.11.2008. LIC is now in the process of establishing a Wholly-Owned Subsidiary (WOS) there.

In 2009-10, all foreign units put together procured new business of 82,794 policies with First Premium income of Rs 207.92 crores, registering a growth of 31.75 per cent (NOP) and 23.81 per cent (FPI). The total Premium Income of all units in 2009-10 was Rs 736.61 crores.

During the financial year 2009-10, the total First Year Premium under Individual Assurances was approximately Rs 50,527.31 crores under 368.38 lakh policies. The Group Insurance brought a new business premium of approximately Rs 20,542.11 crore under 18,573 schemes covering 2,37,57,262 lives.

The Life Fund, as on 31.3.2010, amounts to approximately Rs 9.98,501 crores. The Corporation made payments of around Rs 7,031.62 crores under Death Claim cases, around Rs 46,917.93 crores under Maturity Claims and around Rs 3,770.41 crores under annuities.


The Janashree Bima Yojana (JBY) was launched in 10 August 2000. The Scheme has replaced Social Security Group Insurance Scheme (SSGIS) and Rural Group Life Insurance Scheme (RGLIS). 45 occupational groups have been covered under this schme.

The Scheme provides for an insurance cover of Rs 30,000 on natural death. On death/total permanent disability due to accident, the benefit is Rs 75,000/-. On partial permanent disability due to accident, the benefit is Rs 37,500/-. The premium for the scheme is Rs 200/- per member per annum, 50 per cent of which is met out of Social Security Fund. The balance premium is to be borne by the member and/or Nodal Agency. As on 31 March 2010, about 184.43 lakh have been covered. The balance in Social Security Fund as on 31 March 2010 is Rs 618.83 crore. (Provisional)


The Scheme was launched on 31 December 2001, with the object to lessen the burden of parents in meeting the educational expenses of their children. It provides scholarships to students of parents living below or marginally above poverty line and who are covered under Janashree Bima Yojana and children are studying in 9th to 12th standard (including ITRI courses).

A scholarship amount of Rs 600/- per half year per child is paid for a maximum period of four years and for maximum two children of a member covered under Janashree Bima Yojana.

No premium is charged for this benefit. During the financial year 2006-2010 scholarship were disbursed to 9,13,281 beneficiaries amounting to Rs 67.58 crores.


AAM ADMI BIMA YOJNA, a new Social Security Scheme for rural landless households was launched on 2nd October, 2007 by the then Union Finance Minister at Shimla. The head of the family or one earning member in the family of rural landless household is covered under the Scheme.

The premium of Rs 200/- per person per annum is shared equally by the Central Government and the State Government. Head of the family or one earning member of the family aged between 18 and 59 years is covered for an amount of Rs 30,000/- under the Scheme. In case of death or total disability (including loss of 2 eyes/2 limbs) due to accident, a sum of Rs 75,000/- and in case of partial permanent disability (loss 1 eye/1 limb) due to accident, a sum of Rs 37,500/- is payable to the nominee/ beneficiary. As on 31 March 2010, 1,30,45,666 heads of the families of rural landless households were covered under the Scheme.

A free add-on benefit for the children of the members of AAM ADMI BIMA YOJANA is provided under the Scheme in the form of a scholarship at the rate of Rs 100/- per month and is given to maximum two children studying between IX to XII Standard payable half yearly on 1st July and 1st January each year. During the financial year 2009-2010, scholarship were disbursed to 86,906 children amounting to Rs 54.48 Crores.

Temporary, badli/ substitute workers

SC’s orders on wages, arrears

The Times of India, Aug 10 2016

Vaibhav Ganjapure

SC to LIC: Pay Rs 3,543cr as back wages from 1991  The Supreme Court directed Life Insurance Corporation of India to cough up Rs 3,543 crore as back wages of the temporary and substitute workers who were sacked by the company more than 25 years ago.

Disposing of LIC's review petition, the apex court asked it to absorb about 8,000 such temporary workers across the country , including 350 in Nagpur, in its services, as per existing terms and conditions, and as directed in its original judgment of March 18, 2015.

The apex court directed LIC to comply with its directives in eight weeks as it took into account the fact that the petitioners had been fighting the legal battle for 25 years through All India National Life Insurance Employees Federation.

“These temporary and badli or substitute workers, who are entitled for regularisation as permanent workmen in terms of our March 18, 2015, judgment by applying the terms and conditions of the modified award of August 26, 1988, passed by Justice Jamdar, are held to be entitled to full back wages. “However, keeping in mind the immense financial burden it would cause LIC, we deem it fit to modify relief only with regard to back wages.

Therefore, we award 50% of the back wages with consequential benefits,“ a division bench comprising Justice V Gopala Gowda and Justice C Nagappan ruled.

The review petitions arose from SC's March 18, 2015, verdict which held that the award passed by Central Government Industrial Tribunal, New Delhi, in 1991, was valid and it should be restored by the insurance major by absorbing petitioner workmen in permanent posts. It was held LIC would be liable to pay all consequential benefits, including monetary , taking into consideration the revised pay scale in cases of those workmen who attained superannuation.


Equity investments


Biggest equity investor LIC wary of stocks, Feb 28, 2017: The Times of India

LIC, the country's largest institutional investor, is wary of equities. The corporation's equity investments barely increased during the current fiscal, despite a 40% jump in new business premi um. LIC is, howe ver, bullish on pub lic sector divestment and looking at upcoming issues, including that of the state-owned insurance companies.“We are subdued in equity investments because the market has gone up very high. In any case, LIC has always been contrarian and we continue to follow our 1958 policy of investment, which says primary duty of LIC is to protect the hard-earned income of policy holders and investment return is secondary ,“ said LIC chairman V K Sharma in his first interaction with the media after taking charge.

Sharma said that LIC has used the rise in stock prices to book profits. In the first nine months of the current fiscal, the corporation booked profits of Rs 16,000 crore as against Rs 9,500 crore in the corresponding period last year. The corporation has sold shares worth Rs 39,000 crore as against its purchases worth around Rs 38,000 crore. Sharma said that there was no pressure on LIC to invest in PSU companies and the scenario was quite contrary to that belief. “In fact, we had applied for 60% of the issue of Bharat Electronics (part of government divestment), but we did not get a single share,“ said Sharma. He also indicated that LIC was keen to invest in shares of General Insurance Corporation.

When asked about the likelihood of LIC getting itself listed, Sharma said that being a statutory corporation, the reply to this question could be given only to Parliament. In the first ni ne months of the fiscal, the corporation saw its total premium income grow 12.43% to Rs 1.45 lakh crore and total assets rose 12.8% to Rs 24.41lakh crore from Rs 21.64 lakh crore a year ago.Gross income (including investments) increased 15.8% to Rs 3.37 lakh crore from Rs 2.91lakh crore. Sharma said that of the total investments of around Rs 1.98 lakh crore during the current fiscal, the corporation has pumped Rs 1.83 lakh crore into government and governmentbacked bonds, and the rest had gone largely into fixed income investments.

When asked about the corporation's roles in boardroom battles taking place at Tata Group and Infosys, Sharma said that LIC would primarily depend on the Insurance Regulatory Development Authority of India's proposed code on principles of stewardship. The principles are intended to strengthen the role of insurers as stewards on behalf of the policyholders.“We are sensitive to protecting every single rupee of the policyholder. But at the same time, we have no business to be in their business,“ said Sharma. “Our focus is on clean corporate governance, whether it is for us or whether it is for other companies,“ said Sharma.

Investments: Tobacco companies

Mayur Shetty, LIC has faced objections to tobacco investments , April 15, 2017: The Times of India

A recent petition filed by trustees of the Tata Trust is not the first instance of Life Insurance Corporation of India's (LIC's) investments in tobacco companies being challenged. The corporation has fa ced a similar chal lenge from its bo ard members in the 1990s from independent members who had questioned a life insurance company investing in tobacco. According to S B Mathur, former chairman of LIC, who is on the board of ITC, an independent board member had raised the issue of the corporation investing in a tobacco company in 1997. At that time, LIC took a view to stay invested given that the tobacco company had said that it was diversifying into non-tobacco products and most of the capital expenditure would be in non-tobacco.

Sources in LIC said that the corporation decided to stay invested at that time as the Indian company's battle with British American Tobacco was still fresh in the minds of investors.BAT had made a bid for acquiring control of ITC in 1996, which fell through as the government had intervened. In most takeover battles, LIC is seen to be playing the role of a white knight as it generally does not support hostile takeovers.

Since then, ITC has greatly increased its investments in FMCG, paper, retail and hotels.The only fresh capital investments made by ITC in tobacco was over a decade ago when it relocated its cigarette unit from Parel to Nashik.

LIC, on its part, had not increased investments in ITC. However, earlier this year the corporation was asked by the government to pick up a 2% stake, which was being offloaded by a government arm -SUUTI.

Earlier trustees of Tata Trusts R Venkataramanan and Laxman Sethuraman, along with five others, filed a PIL in the Bombay HC against the Union government, the IRDAI and five state-run life insurance companies for investing in tobacco companies.

State government securities


Investment by LIC in state government securities, as on Dec 31, 2021
From: April 4, 2022: The Times of India

See graphic:

Investment by LIC in state government securities, as on Dec 31, 2021

Utilisation of LIC’s funds

2018: State govts get bulk of LIC’s funding=

State govts get bulk of LIC’s FY18 funding, September 29, 2018: The Times of India

LIC’s investment in state & government debt (in Rs Lack crore)
From: State govts get bulk of LIC’s FY18 funding, September 29, 2018: The Times of India

Receive 38% More Than Centre’s Share

The Life Insurance Corporation (LIC), which has historically been the largest financier of the government’s fiscal deficit, has seen its investment in state loans outstrip purchase of central government securities by more than 38% in fiscal 2017-18.

According to data from the corporation’s annual report, it has invested Rs 1.09 lakh crore in central government securities as against Rs 1.51 lakh crore in state government loans. Historically, the bulk of the corporation’s investments has been in central government securities. However, for the last two years, LIC’s investment in state government papers has picked up with the share of the latter growing. One reason for this is the higher yield in state loans as compared to central government securities.

While state governments do not have the same creditworthiness as the central government, which can create money, state loans are generally considered relatively riskfree. This is because unlike bonds issued by state government undertakings, in state loans the RBI repays the investors directly from the accounts the state governments hold with the central bank. State loans offer a higher yield than central government security because the state papers are not as liquid. Despite increased investment in state government papers, LIC’s yield on total investment stood at 7.71%, down from 7.78% in the previous year.

Total investments of the corporation amounted to Rs 27.4 lakh crore as on March 31 this year, up 10% from Rs 24.7 lakh crore in March 2017. In FY18, the corporation invested Rs 41,418 crore in infrastructure, which was almost double the Rs 20,987 crore investment made in the previous year. In FY18, key infrastructure investments included Rs 20,553 crore in roads, bridges and state road transport corporation, and Rs 14,113 crore in the power sector. In FY17, the corporation invested Rs 13,858 crore in roads, bridges, railways and ports and Rs 6,400 crore in housing and housing finance companies.

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