Is panel staring at a conflict of interest in LIC chief selection?

Mumbai: The panel to choose the chairman of the Life Insurance Corporation of India is staring at a potential conflict of interest with one of the members of the panel having business dealings with the insurer, said two people familiar with the matter.

Thomas Mathew, a member of the selection committee, as head of reinsurance services provider RGA Services, does reinsurance with LIC about which questions could be raised in future, said the people mentioned.

“Thomas is a chief executive of a foreign reinsurance company and will have his interests in mind while selecting the chairman,“ said one of the executives.

A six-member government-appointed panel is looking to appo int the chairman of LIC after SC Roy quit a few months ago suddenly without assigning any reason. ET, in its edition dated September 17, reported that the government has initiated an inquiry into Roy's actions in loaning funds to real estate company Unitech. Managing director VK Sharma is steering the biggest life insurer currently.

An email sent to finance ministry did not elicit any response.

“There is no conflict as the selection system process is robust and it has reformed in the last 3-4 years,“ said a finance ministry official. “Insurance is a very technical area unlike banking which many can access.“

Other members of the selection panel include former LIC chairman GN Bajpai, Irda chairman TS Vijayan, secretary, department of financial services Anjuly Chib Duggal and two other government nominees.

RGA Services, a unit of US-based Reinsurance Group of America, that began operations recently has hired Mathew to run the unit. It underwrites reinsurance business for life insurance companies in India.