The recapitalisation of three state-owned general insurers is slated to be discussed at a meeting today (2 August).
The General Insurance Public Sector Association (GIPSA), the apex body of the three state-run non-life insurers comprising United India Insurance, Oriental Insurance & National Insurance, has urged the Department for Financial Services (DFS) to recapitalise their operations.
Representatives of New India Assurance, which is a listed insurer and the country’s biggest general insurance company, will also attend the meeting that will be addressed by DFS Secretary Vivek Joshi. The meeting will focus on crucial aspects such as capital requirements, financial performance and business revival plans, according to a report by Bizz Buzz, an online business daily.
While National and United have sought recapitalisation of INR65bn each, Oriental has requested INR145bn from the government, sources familiar with the development.
DFS sources say that the government has made up its mind to collaborate with the insurance companies and may provide the necessary financial support to ensure the smooth functioning of the sector.
As of 31 March 2022, National Insurance’s solvency margin stood at 0.31 times, much lower than that of the minimum requirement of 1.5 times. At the same time, Oriental has reported a solvency ratio of 0.15 times and United’s solvency margin was 0.51 times.
