The central authorities will reportedly infuse Rs 5,000 crore as fairness help into state-run general insurers. This comes days after the centre accredited the wage revision plan for workers of general insurers. According to a report in Economic Times (ET), the wage revision is probably going to price Rs 8,000 crore to the businesses.
“A fresh assessment may be done by the end of the December quarter and, accordingly, a capital allocation may be made,” an official conscious of the matter instructed ET.
This is over and above the help of Rs 5,000 crore already given to general insurers. National Insurance has been given Rs 3,700 crore, Oriental Insurance Rs 1,200 crore and United Insurance Rs 100 crore, the report added.
Only New India Assurance is worthwhile amongst all of the 4 state-run general insurers. Oriental Insurance, National Insurance and United India are loss-making.
“A restructuring exercise is already being worked out for the general insurers. Once that is implemented, we will have a better assessment of the individual requirements of each insurer,” one other official instructed ET.
On October 14, the finance ministry notified the wage revision plan for officers and staff of state-run insurers. They will get wage arrears from August 2017. Also, the following revision will likely be performance-based.
Insurers have picked consultancy agency EY to advise them on the restructuring process.
The authorities has additionally been transferring forward with the plans to privatising one general insurer. After the General Insurance Business Amendment Act, the federal government can now personal a 51 per cent stake in public insurers. According to studies, United India will be the first one to be divested.
