The Insurance Regulatory & Development Authority (IRDA) has openly criticized the Finance Ministry for its move of hiking the investment limit for LIC from the 10 per cent to 25 per cent.

The IRDA said that hiking the investment limit for LIC would jeopardize LIC corpus fund and put its policy holders at risk,

IRDA Chairman J Hari Narayan openly said that the Finance Ministry's concerned move was against prudence because it would amplify the risk of LIC.

Criticizing the government over the move, Narayan said, "It is against the (Irda) Act and against any prudence. They have to understand the gravity of the issue and the potential danger... I do not agree with the government."

A senior finance ministry official said his ministry had taken the decision only after the law ministry gave it green signal for the same.

But, Narayan argued that while the Finance Ministry was saying that it had taken the step only after taking opinion from the law ministry, the IRDA would ask it to reconsider the matter.

LIC already has exposure in excess of 10 per cent in around 78 companies, of which merely 27 are listed, such as L&T, ITC, JSW Steel and MTNL. LIC has plans to increase investments in equities from Rs 49,960 crore in the last financial year to nearly Rs 50,000 crore during the current financial year.