Lok Sabha Question No. 1140 (UNSTARRED), answered on 2025-02-10
Subject: Steps to Enhance Bonus for LIC Policyholders
Ministry: FINANCE
Asked by: Shri Parshottambhai Rupala

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UN-STARRED QUESTION NO- 1140

TO BE ANSWERED ON MONDAY, 10 FEBRUARY, 2025 / MAGHA 21, 1946 (SAKA)

## Steps to Enhance Bonus for LIC Policyholders

## 1140. SHRI PARSHOTTAMBHAI RUPALA:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has evaluated the workload of individual employees and branches within LIC and if so, the details thereof and if not, the reasons therefor;
- (b) the steps taken to enhance the vigilance system in LIC and ensure continuous monitoring to avert any possible manipulation;
- (c) the reasons for not mentioning in LIC's policy documents that every policy issued by LIC is supported by the Government's sovereign guarantee in accordance with section 37 of the LIC Act, 1956;
- (d) the measures taken by the LIC to reduce unproductive costs and the reasons for continuous oversight of these expenses at the senior management level; and
- (e) the initiatives taken by the LIC to enhance bonus for all policyholders?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

- (a) LIC is a Board governed commercial entity operating in a competitive and regulated environment and has  a  robust  performance  appraisal  system  for  all  employees.  Further  performances  of  individual employee are assessed by LIC through Key Performance Indicators (KPIs) set at the start of financial year  and  reviewed  twice  in  a  year.  Performance  of  LIC  is  reviewed  at  regular  intervals  by  the Government.
- (b) LIC adheres to CVC guidelines to ensure continuous monitoring to avert any possible manipulation. LIC inter -alia conducts  surprise  checks,  Audits,  Inspections,  scrutiny  of  returns  on  immovable  / movable  assets,  review  of  procurement  of  materials  and  service  contracts  etc.  Committees  like preventive vigilance committee and fraud monitoring committee are already in place.
- (c) LIC is governed under the provisions of Life Insurance Corporation Act, 1956, Insurance Act, 1938, IRDAI  (Insurance  Regulatory  and  Development  Authority  of  India)  Act,  1999  and  the  rules  and regulations  made  thereunder.  Whereas,  LIC's  policy  document  is  a  contract  between  Insurer  and Policyholder for the entire duration / term of the policy. However, the sum assured by all policies including  any  bonuses  declared  in  respect  thereof  is  supported  by  the  Government's  sovereign guarantee as indicated in section 37 of LIC Act.
- (d) Budget Review is being done regularly and Expenses of Management (EOM) are being monitored as per the IRDAI EOM Regulations. Further LIC has taken measures viz . installing of solar panels, LEDs, sensor  operative  switches  and  conducting  most  of  the  meetings  and  trainings  through  video conferencing for reducing expenses.
- (e) The bonus payable depends on the surplus generated as result of an annual actuarial investigation in accordance with relevant rules and regulations. LIC strives to generate optimal returns by ensuring investment in high quality assets while ensuring a risk reward balance, which is also reviewed by the Investment Committee of LIC.

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