The Union government suspended New India Assurance chairman M Ramadoss on 16 August 2011 for alleged violations in issuing insurance cover to an airline during his stint as head of another state-run insurer. The Central Bureau of Investigation (CBI) examined Ramadoss' role in irregularities in granting credit insurance cover to Paramount Airways when he was chairman and managing director of general insurance firm Oriental Insurance.
The government started looking into the affairs of New India Assurance, the country's largest general insurance firm, after it posted a net loss of Rs 421 crore last fiscal, the first time in 90 years of operations.
This is the second instance of action being taken against a head of a public sector insurance firm. Earlier, TS Vijayan, the chairman of the country's largest insurer, Life Insurance Corporation was denied an extension after complaints against him surfaced.
United India Insurance head G Srinivasan would take additional charge of New India Assurance temporarily.
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