Bhagwat Karad, minister of state, ministry of finance
As per inputs received from Department of investment and Public Asset Management(DIPAM), the government has not yet decided on the public sector general insurance companies that are to be privatised
The government is in receipt of a proposal from GIPSA, the coordinating body for public sector general insurance companies for capital infusion of towards supporting their solvency position
New Delhi;
The government is yet to decide name of the public sector general insurer which will be privatised.
Bhagwat Karad, minister of state, ministry of finance (MoF) in his reply to a question whether the government has arrived at the names of public sector general insurers for privatisation, in the in Lok Sabha on Monday said,“ As per inputs received from Department of investment and Public Asset Management(DIPAM), the government has not yet decided on the public sector general insurance companies that are to be privatised.”
There are four state-owned general insurers in the general insurance space, namely New India Assurance, National Insurance Company Limited, Oriental Insurance Company Limited, and the United India Insurance Company.
In the reinsurance space, GIC Re is the largest reinsure of the country, which is majority government-owned but has gone public.
However, the government is in receipt of a proposal from GIPSA, the coordinating body for public sector general insurance companies for capital infusion of towards supporting their solvency position, said Karad without giving any other details on the issue.
Except NIA, ret of three PSU general insurers don’t have required solvency ratio of 1.5%.
In a bid to improve financial health of the three state-owned general insurance companies, OIC, UII and NIC, the Finance Ministry has decided to infuse Rs 5,000 crore capital into them during the current quarter of the fiscal.
The government last week sought Parliament nod for net additional spending of over Rs 1.07 lakh crore, including Rs 5,000 crore towards providing additional capital to three of PSU general insurance companies in the third batch of supplementary demands for current fiscal year, confirmed ministry of finance officials.
However, on the wage revision for the workforce of public sector general insurance companies, Karad said government is yet to receive any proposal from the GIPSA at present.
Union finance minister Nirmala Sitharaman, in her 2021-22 Budget had announced that the government will look to take up the privatization of two public sector banks and one general insurance company in the year 2021-22.
While the government has not given out the names of the banks or the insurance company they will look to privatise, various names have been floating around since the announcement was made.
Recently, the government passed the general insurance business (Nationalisation) Amendment Bill in the parliament, with an aim to push greater privatisation in public sector general insurers. The bill seeks to remove the requirement that the Centre should hold not less than 51 per cent of the equity capital in such insurers.