General Insurance Companies: The Finance Ministry is working on a plan to infuse additional capital of Rs 3,000 crore in three loss-making public sector general insurance companies in the current financial year. Sources have given this information.
General Insurance Companies: The Finance Ministry is working on a plan to infuse additional capital of Rs 3,000 crore in three loss-making public sector general insurance companies in the current financial year. Sources have given this information.
In the financial year 2021-22 also, the government had infused capital of Rs 5,000 crore in three general insurance companies. National Insurance Company Limited was given the highest amount of Rs 3,700 crore while Oriental Insurance Company Limited got Rs 1,200 crore and United India Insurance Company got Rs 100 crore.
Finance Ministry gave information
According to sources, the Finance Ministry has asked these companies to improve their solvency ratio and meet the regulatory condition of 150 percent. Solvency ratio is a measure of capital adequacy. Higher this ratio indicates better financial position of an institution in which it is in a position to pay the claims.
How much will be the stake?
However, except for New India Assurance, the delinquency ratio of other public sector general insurance companies has been much lower than the regulatory requirement of 150 percent. In the financial year 2021-22, the delinquency ratio of National Insurance was 63 percent, Oriental Insurance was 15 percent and United India was 51 percent. Sources said that all these insurance companies were asked to follow the path of profitable growth. It will depend on their performance that what will be their share in the additional capital received from the government.
Capital of Rs 2,500 crore was infused
before this, in the year 2019-20 also, the government had infused capital of Rs 2,500 crore in these general insurance companies. Then in the year 2020-21 also, the government had infused capital of Rs 9,950 crore in these companies.
