Public sector insurance companies in India are poised for a significant structural transformation with the impending completion of the selection process for nine executive director (ED) positions as the country moves away from the traditional roles of general managers and directors (GMDs), aligning with the structure of public sector banks.
Under the new system, an ED of a public sector undertaking (PSU) general insurance company will receive a higher salary than that of a GMD, a decision awaiting finalisation by the government. The Department of Financial Services (DFS) proposed the change, subsequently approved by the Appointments Committee of the Cabinet (ACC), which has also established guidelines for these appointments.
The PSU general insurance companies, including GIC Re, New India Assurance (NIA), National Insurance Company (NIC), Oriental Insurance Company (OIC), United India Insurance Company (UII), and Agriculture Insurance Company (AIC), will adopt this new structure, as per a report from The Indian Express.
Each PSU insurance company will have two ED positions, and there are currently nine vacancies across these organisations. This shift follows the government’s appointment of 10 GMDs in November 2022, before transitioning to the ED framework.
Eligibility for the ED role requires general managers of PSU non-life insurance companies to have at least one year of service and a minimum of one year remaining before the vacancy. This criterion can be relaxed with the Finance Minister's approval if necessary.
Future chairman and managing director (CMD) roles in the PSU general insurance sector will be filled by promoting officials to ED positions, a departure from the previous practice of considering general managers for these roles.
The Financial Services Institutions Bureau (FSIB), responsible for selecting top officials in PSU banks and insurance companies, will also oversee the selection of EDs. The FSIB's recommendations are valid for up to one year or as per government orders, subject to extension approval by the ACC.
FSIB has already shortlisted several GMs for these positions, including seven from New India Assurance (NIA), the country's largest non-life insurance company. Additionally, the DFS has shortlisted five GMs from various PSU insurers for two upcoming CMD vacancies at United India Insurance and New India Assurance.
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