PSGIC trade union writes to President against DFS joint Secy Saurabh Mishra

Even as the Joint Secretary at Department of Financial Services (DFS), Saurabh Mishra, is nearing fast to demit his office, his troubles are on the rise. He has already put up his papers and is likely to complete his notice period by the month-end.

The public sector general insurance companies (PSGIC) trade unions continue to level allegations against him to various high-ranked officials in the government at the Centre.

In the fresh letter sent to the President of India, Trilok Singh, general secretary, General Insurance Employees all India association (GIEAIA), says, “In last one and half years many of the unilateral and private comfort centric changes have been proposed and getting implemented unilaterally by Saurabh Mishra, Joint Secretary, DFS, in the PSGI industry, to destabilise the PSGI companies indirectly and to support and strengthen the private insurance companies.”

The said official who has entered DFS through ‘lateral entry’ and thereafter nominated to the Board of National Insurance Company, one of the four public sector general insurance companies as director and has been trying to weaken the public sector general insurance companies which goes against the national interest as well as national financial security.

Talking to Bizz Buzz, Singh said, “We reliably learnt that the above official has been misusing the company’s guest houses, cars for his family members and it is a matter of record that he has directed the Delhi Regional Office-I Management of National Insurance Company to provide a car for his family permanently, thereby causing huge financial liability which runs into lakhs, whereas he had been directing the officials of the company to adopt austerity measures.”

It has also come to our notice that the said official, who was supposed to strengthen the public sector general insurance companies by boosting the morale of top executives, has rather harassed, demoralised and misbehaved with them, including the senior most women executives, he added.

He (Mishra) is in continuous habit of using foul language with unparliamentarily contents which have broken the moral of the senior executives of these public sector general insurance companies, which made them to opt for voluntary resignation, the letter reveals.

Some of the wrong and unilateral implementation by Mishra has badly affected the PSGI companies.

First among them being the appointment of Earnest and Young (E&Y) as consultant to destabilise the PSGI companies. Around Rs 10 crore was paid to the firm from public funds. In FY22, the management of the PSGI companies on the advice of the DFS, appointed one consultant namely, E&Y to diagnose and identify the reasons attributed to the losses of these companies and to design and implement the necessary changes to make it profitable. The credibility of the auditors of E&Y are under question as it has been established that numerous of their auditors have cheated on exams required for CPA licences for which, a huge penalty of $100 million has been imposed on them by the US government. Further Germany’s audit watchdog, slapped heavy sanctions on accounting firm E&Y, which has come under scrutiny for failing to spot large-scale fraud related to Wirecard scandal.

Public sector general insurance services for Tier-II and III cities of the country, stopped. The management of the PSGI companies, in compliance of the DFS, have driven the Key Performance Indicators (KPI) and organisational restructuring, had closed over 1,000 of their offices in last 1-2 years especially in Tier-II and III cities of India which clearly affects the 3 penetration level of general insurance services to the common man of the society. Several profitable and viable offices have been closed with a hidden agenda to weaken the PSGI companies. Moreover the citizen of India in Tier-II and III cities will face the actual problem while pursuing their claims as private companies has rare offices in Tier-III cities of India.

Interference of the said official in the micro-management of public sector general insurance companies runs by a sovereign board. The directions given by the Prime Minister at Pune during Gyan Sangam held on 2-3 January 2015 for strengthening and assuring the freedom, fairness and effectiveness in the working of the public sector banks and other financial institutions have been grossly violated.

Meeting of joint forum of trade unions and associations, JFTU held at New Delhi on January 12, took strong objection and opposed the haste, arbitrary and unilateral imposition of KPI and organisational restructuring as proposed by DFS and being facilitated by E&Y in PSGI companies.

The JFTU constituents unanimously rejected the KPI and organisational restructuring on pilot basis as the decision was taken without taking the views of the stakeholders and also decided to implement without assessing and creating pre-essential infra and IT support. Further, the decision of pilot rollout was taken without having complete report of the consultant E&Y. Even before submission of final report of the consultant E&Y, the Joint Secretary pressurised PSGI companies to move forward on the partial recommendations of the consultant without any analysis.

The PSGIC’s management under pressure of the JS, DFS and E&Y has agreed to the suicidal recommendation of the consultant by implementing fixed percentage on motor vehicle insurance business policy in the operating offices which impacts, crores of motor insurance premium of PSGIC being diverted to private insurance companies. All the constituents of JFTU have unanimously condemned the implementation of the fixed percentage of discount across all segments of the motor vehicle business in the operating offices.

In view of these allegations, the association strongly believes that the nonprofessional and irrational approach of Mishra, the interest of the common man and customer services are being affected and also weakening of the public sector general insurance companies.

Hence, it has urged the President of India to intervene and direct a thorough investigation through an independent agency and to take stern action against the erred the said official to save these public sector general insurance companies.