The Finance Ministry may inject capital into three public-sector general insurance companies – United India Insurance, National Insurance and Oriental Insurance – to improve their solvency positions.
A decision would be made after analysing the companies’ financial results for the October-December 2023 (3QFY2024) and January- March 2024 (4QFY2024) periods, the Department of Financial Services (DFS) secretary Vivek Joshi has indicated, according to a report by MoneyControl.
Stating that the solvency ratio of the three state-owned insurers — is still low, Mr Joshi said in an interview with MoneyControl, “We seek exemption from IRDAI (Insurance Regulatory and Development Authority) for all three. That is an issue. We will see how they perform in Q3, Q4. There was no provision for capital infusion into them in the interim Budget. If they perform well, the government may think of putting some capital in them.”
So far, the government has infused INR175bn ($2.1bn) into the insurers.
Finance Minister Nirmala Sitharaman had announced plans to privatise a general insurance company when she delivered the Budget for 2021-22. This remains a proposal.
As with the interim Budget announced on 1 February 2024, the government did not allocate any funds for capital infusion into the three insurance companies in the Budget for the fiscal year ending March 2024 (FY2024).
