NEW DELHI: The Department of Financial Services under the finance ministry has amended the Life Insurance Corporation of India (Employees) Pension (Amendment) Rules as per which Life Insurance Corporation of India (LIC) will now have the post of chief executive officer (CEO) and managing director instead of the Chairman position. 

This arrangement has come into effect ahead of the life insurer’s initial public offer (IPO) in this financial year.

"Chief executive and managing director mean the chief executive officer and a managing director appointed by the Central Government under Section 4 of the Act (LIC Act, 1956)," this is according to a gazette notification issued on July 7.

To facilitate the listing of the insurance behemoth, the government has already approved raising its authorised share capital to Rs 25,000 crore. Besides, the Department of Economic Affairs under the Finance Ministry recently amended the Securities Contracts (Regulation) Rules.

Companies that have a market capitalisation of more than Rs 1 lakh crore at the time of listing can now sell just 5 per cent of their shares, with the latest amendment in rules, a move that will be beneficial for the government during LIC’s IPO. 

Such entities will be required to increase their public shareholding to 10 per cent in two years and raise the same to at least 25 per cent within five years.