Decline in policy sales
According to the documents submitted by LIC to the market regulator SEBI, there has also been a sharp decline in LIC’s policy sales. Sales of individual and group policies declined by 16.76 per cent to 6.24 crore in FY 2019-20 from 7.5 crore in FY 2018-19. At the same time, in the financial year 2020-21, it declined by 15.84 and this figure stood at 5.25 crores. According to the information shared by the company, the sales of individual policies declined by 22.66 per cent to 63.5 lakh in the fourth quarter of 2019-20 due to the lockdown, from 82.1 lakh in the same period a year ago. It declined by 46.20 per cent to 19.1 lakh and then by 34.93 per cent to 23.1 lakh in the first quarters of 2020-21 and 2021-22 respectively.
increased financial burden on the company
While the company suffered a loss due to the decrease in policy sales, on the other hand, the financial burden on the insurance company has increased continuously in the case of payment for insurance of death due to infection and other reasons during the corona period. A report said that the total number of individual and group policies of the company has declined due to the COVID-19 pandemic. Whereas, death insurance claims have increased. According to this, Rs 17,128.84 crore, Rs 17,527.98 crore and Rs 23,926.89 crore have also been paid for death insurance claims for the financial years 2019, 2020 and 2021 respectively. 21,734.15 crore was paid for the six months ended September 30, 2021.
75000 crore outstanding
The country’s largest insurance company, which is preparing for an IPO (Initial Public Offering), owes about Rs 75,000 crore to the Income Tax Department. The special thing is that Life Insurance Corporation of India (LIC) does not want to use its funds to pay tax liabilities. According to documents submitted to market regulator SEBI for the IPO, there are 63 pending cases involving direct and indirect taxes of Rs 74,894.6 crore on LIC. Of these, the insurance company owes Rs 72,762.3 crore in 37 direct tax cases and Rs 2,132.3 crore in 26 indirect tax cases, which are yet to be recovered.
21,500 crore unclaimed amount
Let us tell you that according to the information shared by LIC, it has Rs 21,500 crore of policyholders who are lying unclaimed till September 2021. That is, there is no one to claim for them. This means either these policyholders have died or their families are not aware of them. 18,495 crore as of March 2021 and Rs 16,052 crore by March 2020, which was Rs 13,842 crore as of March 2019.
Totally Offer for Sale IPO
This IPO of LIC will be the biggest IPO till date. As per the DRAP submitted to SEBI, the issue of LIC will be purely offer for sale. In this, the government will issue 31.6 crore shares under its 5 per cent stake. According to the report, according to this the embedded value of the company will be Rs 5.4 lakh crore. Normally the market cap of an insurance company is four times this value. According to this, the market value of LIC will be $ 288 billion i.e. about Rs 22 lakh crore and LIC will become the largest valued company of the country.
LIC gave this great facility
Due to non-payment of premium on time or due to any other reason, many people’s LIC policy gets closed. On behalf of the company, it has been said that the policies which have been closed for five years, in such a case, they can be revived by paying less charge. As per the report, policyholders whose policies have been discontinued may also be eligible to apply for an IPO through reservation portion. The documents state that all such policyholders are entitled to invest under reservation for IPOs that have not been taken out of LIC’s record due to maturity, surrender or death of the policyholder.