Mumbai: Rakesh Singh, additional secretary in the department of financial services, ministry of finance, has been appointed the interim chairman of India’s largest financial institution Life Insurance Corp. of India (LIC) for three months from 3 May, said an LIC official briefed on the matter.

The move follows the government’s refusal to extend T.S. Vijayan’s five-year tenure as LIC’s chairman. Vijayan’s tenure expired on 2 May, but he is eligible to hold office for two more years as a government official.

Shared responsibilities: A file photo of LIC’s managing directors D.K. Mehrotra (left) and T.S. Vijayan in Mumbai. Photo Santosh Harhare/HT

Singh, a 1978 cadre officer of the Indian Administrative Service, also holds additional charge as the temporary chairman of the National Bank for Agriculture and Rural Development, the sectoral regulator for cooperative banks and regional rural banks. He is expected to assume office at LIC on Wednesday.

LIC, the only state-owned life insurer, has an asset base of at least 12 trillion. Over the past year, the insurer has been facing allegations of unfair practices in lending and investments, poor actuarial activities and weak risk management systems.

A three-member panel constituted by the finance ministry has been scrutinizing all investments made by LIC in 2008 and 2009 and has prepared a report, which is yet to be published.

Sanjeev Kumar Jindal, director, department of financial services; Tarun Bajaj, joint secretary (insurance and banking); and Ravneet Kaur, joint secretary (banking and insurance), were the members of the panel.

In November, in an alleged bribe-for-loan scam, the Central Bureau of Investigation arrested LIC Housing Finance chief executive R.R. Nair and Naresh K. Chopra, secretary (investment) at LIC. The agency alleged that the officials had accepted bribes to facilitate large-scale corporate loans and had leaked vital insider information on the insurer’s investments.

LIC was also found to be running a notional valuation deficit of around 14,000 crore in three plans of its guaranteed-return annuity policies—Jeevan Dhara, Jeevan Suraksha and Jeevan Akshay.

Earlier last year, LIC Mutual Fund posted a 120 crore loss following a new norm of the Securities and Exchange Board of India that directs all mutual funds to value their investments in all securities maturing at 91 days or later based on current market value, or on a mark-to-market basis.

There have been several changes in the top management at LIC, while these incidents were taking place.

With Vijayan, there would be four managing directors at LIC. Its other three managing directors are D.K. Mehrotra, Thomas Mathew and A.K. Dasgupta.