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"I think, it is imprudent," Narayan told reporters on the sidelines of an Insurance Brokers Association of India event.
"Our interpretation was that LIC should be treated at par with all other private insurers. But the government was of the view that there were certain provisions, only applicable to LIC (as per LIC Act). So, it's a question of legal position," Hari Narayan said.
The government has allowed LIC to invest up to 30 per cent in a company against the existing norm of 10 per cent as stipulated in the Insurance Act, 1999 after the Law Ministry clarified that LIC Act, 1959 supersedes the Insurance Act, 1999.
The government is likely to notify the new rules soon.
Referring to the autonomy of regulators, Insurance Regulatory Development Authority (IRDA) Chief said the regulator has enough autonomy and the present issue of difference in approach to LIC case was a matter of legal position.
Meanwhile, he said the board of the Insurance Advisory Council would meet shortly to discuss the new product design guidelines.
"The product design guidelines have been examined by the council. They now have to be approved by the board and they are meeting on January 9," Narayan said without divulging any details regarding the proposed guidelines.
He also said management expenses of the insurance industry in the country were one of the highest in the world and needed a relook.
All these Insurance companies are making huge profit at the cost of their costumers hard earned money. They cheat customer and steal their money. I realized this only after taking Insurance policy from MET LIFE and another company. The truth is they take away 20% from your first premium and then balance amount is invested in Equity/ bond or debt according to your policy. Then after from each premium payment they deduct the certain percentage. Over and above they charge administration fees, maintenance fees each year. The keep buying and selling and shuffling your fund in equity / debt and bond market. Doing this they make money in each transaction and manipulating NAV. If you check all transactions applied to your account you will find that about 40% of your fund is taken away by insurance companies. During first few years they will never show profit or gain so you can not get out. On the other hand the "promised profit or gain on your capital is never guaranteed and even you may lose
