Lok Sabha Question No. 1560 (UNSTARRED), answered on 2016-03-04
Subject: LIC Audit
Ministry: FINANCE
Asked by: UDIT RAJ

1560. DR. UDIT RAJ: Will the Minister of FINANCE be pleased to state:

- (a) whether internal audit report of Life Insurance Corporation (LIC) unearthed irregularities/fraud in India and abroad in the recent past;
- (b) if so, the details thereof;
- (c) the steps taken by the Government to investigate these allegations and change book keeping patterns to ensure such allegations are not made in future; and
- (d) whether the Government planning audit of LIC by independent authorities and if so, the details thereof?

## Answer Minister of State in the Ministry of Finance

## (Shri Jayant Sinha)

- (a) & (b) The Internal Audit Department conducts audit of all offices of the Life Insurance Corporation (LIC), which is an ongoing process. The findings of audit which are having fraudulent angle are referred to Vigilance Department or law Enforcement Agencies, as the case may be, for further investigation and necessary action.

LIC of India has three branches abroad one each in Fiji, Mauritius and UK. The audit report of these three branches did not find any irregularities/frauds in the recent past.

Details of irregularities observed by audit for the period 2014-15 onwards are given in Annexure.

- (c) The Corporation has an approved Anti Fraud Policy as a part of Fraud Monitoring Framework for the Corporation in accordance with Para C of IRDAI Circular no. IRDA/SDD/MISC/CIR/009/01/2013 dated Jan 21, 2013. The statistics regarding various fraudulent cases detected and action taken thereon are filed with IRDAI every year within 30 days of the close of the financial year providing details of outstanding fraud cases business segment wise and closed fraud cases.
- (d) According to Section 25(1) of Life Insurance Corporation of India Act, 1956, the Accounts of LIC of India have to be audited by Auditors duly qualified to act as Auditors under Companies Act, 1956 and they are appointed by the Corporation with the approval of the Government. Since inception, LIC of India is subject to audit by Independent Statutory Central Auditors (SCA) and Statutory Divisional Auditors (SDA). Sample Only

## Government of India Ministry of Finance Department of Financial Services Lok Sabha Unstarred Question No.1560

To be answered on Friday, March 4, 2016/Phalguna 14, 1937 (Saka)

## LIC Audit

Details of irregularities observed by Audit for the period 2014-15 onwards

| Zone             | BO/DO Audit Report                         | Nature of fraud                                                                                                    |
|------------------|--------------------------------------------|--------------------------------------------------------------------------------------------------------------------|
| Northern Central | Lal Baug(397)/ Lucknow 2014-15             | Misuse of Corporations money by using fake receipts. Amounting to approx. Rs. 3,12,259/-                           |
| Northern Central | Haldwani (24F), Haldwani 2015-16           | Death claim payment on the basis of Fraudulent claim papers. Amount involved approx: Rs. 4,90,214.00/-             |
| Central          | Bhilai BO (381) Raipur DO 2015-16          | Existence of dummy agency - 10 cases Other benefits Rs 4,58,222/-                                                  |
| East             | Midanpore (466)/ Kharagpur 2014-15         | Death claim settled against fake death certificate. Amounting to Rs. 3,26,020/-                                    |
| East             | Golpara (48D) Bongaingaon 2014-15          | Large no of plough back cases (recycling of death claim) registered amounting to Rs. 20,72,850/-                   |
| Eastern Central  | Lakshahari BO (52E), Begusarai DO. 2015-16 | Fraudulent encashment of cheque. From A/C 2 and A/C 4 Approx. amount Rs. 46,42,716/-                               |
| Eastern Central  | Barh (530) Begusarai DO 2015-16            | Fraudulent encashment of cheques amounting to approx. Rs. 466421/-                                                 |
| Eastern Central  | Ramgarh(519), Hazaribagh 2015-16           | Fraudulent encashment of cheques amounting to approx. Rs. 10,00,000/-                                              |
| South            | Arani BO(73N) Vellore DO 2015-16           | Encashment of cheques from policy deposit schedule by an employee. Approximate amount Rs. 3,78,440/-               |
| Southern Central | JAGGAIPET/ MACHILIPATNAM 2014 -15          | Fraudulently Cheques encashed by writing on his name by employee, by passing wrong accounting entries Rs.1485252/- |
| Southern Central | Tanuku /Rajamundry 2015-16                 | Policy amount Rs.46661/- was wrongly credited to his own account by agent, giving fictitious bank statement        |

Source:

Life

Insurance

Corporation

of

India

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