The government is considering divestment of its stake Life Insurance Corporation of India (LIC) this financial year, according to news reports. The finance minister in her budget speech had increased the divestment target for the current financial year to Rs 1.05 trillion from Rs 90,000 crore in the previous year. The reports suggested that the divestment program of LIC is in the early stage and has been discussed within the government. The government may sell a small stake initially through an IPO and then reduce the holding substantially later. The government will have to amend the LIC Act of 1956 in order to come out with an IPO. The government feels that listing of LIC can lead to transparency and better governance in the insurance sector. At present, LIC is under the supervisory oversight of the Insurance Regulatory and Development Authority of India (IRDAI), but it is governed by the LIC Act of 1956.
