DFS Joint Secretary pressurised GIPSA to select EY to rejig general insurers: CPI MP

CPI Rajya Sabha Member Binoy Viswam has asked the Union government as to how Ernst & Young (EY), which has been fined overseas, has been selected as the consultant to restructure the government-owned non-life insurers.

In a letter to Union Finance Secretary Vivek Joshi, the CPI leader has also claimed that Saurabh Mishra, Joint Secretary, Department of Financial Services, has pressurised the General Insurance Public Sector Association (GIPSA) to select EY through a tender process for rejigging the government-owned insurers.

Viswam in his letter said: "Saurabh Mishra, Joint Secretary, Department of Financial Services (DFS), for the reasons best known to him only, has pressurised GIPSA to select a consultant, i.e., Ernst & Young, through a tender process in the name of having profitable growth and efficiency in the PSGICs (public sector general insurance companies), for which a huge amount of public exchequer has been paid to this consultant."

"But the question of serious concern is that how a consultant having a dubious character, which has been fined $100 million in the US for cheating on Certified Public Account Exam (CPA), has been selected by GIPSA, and not objected by the DFS," Viswam wondered.

"A recent media report reveals that the said consultant has been very heavily fined of around 5,00,000 euro and the German audit watchdog banned Ernst & Young over the Wire Card scandal from taking new audit work of the companies of public importance," Viswam added.

Viswam also told Joshi that the public sector general insurance industry at present is facing unrest due to organisational restructuring and unilateral imposition of key performance indicators (KPI)/closure and merger of offices in the name of restructuring.

"Several media reports also confirm that the PSGI industry, which is worth more than one lakh twenty-five thousand crore (1,25,00,000+ crore) is being ruined," the letter noted.

Viswam also raised the issue of GIPSA and DFS bypassing the orders of the Chief Labour Commissioner, Government of India, to have bilateral discussions with the stakeholders and started unilaterally implementing the recommendations of EY.

The Rajya Sabha member said that more than 1,500 offices have been closed/merged by the managements of the four government-owned non-life insurers, resulting in denial of excess of general insurance policies to the general public of the country, especially in Tier II and III cities.

Viswam urged Joshi for his immediate and effective intervention to ensure the sanctity of the authorities viz. Chief Labour Commissioner, and also to restore justice to all the working class and the policyholders of the general insurance industry.