General Insurance Company: The Finance Ministry will decide on capital infusion of Rs 3,000 crore in the current financial year based on the financial performance of loss-making public sector general insurance companies.
General Insurance Company: The Finance Ministry will decide on capital infusion of Rs 3,000 crore in the current financial year based on the financial performance of loss-making public sector general insurance companies. According to sources, the Ministry of Finance last year all three insurance companies… National Insurance Ltd., Oriental Insurance Company Ltd. And United India Insurance Company… was asked to focus on profits instead of business and only good proposals with better valuations were asked to go ahead.
Last year capital of 5000 crores was given
He said that the financial data for the financial year 2022-23 will reveal the profit position and ‘solvency margin’ i.e. the effect of the restructuring initiated on the remaining capital after the estimated liability. The government last year merged all the three general insurance companies… National Insurance Ltd., Oriental Insurance Company Ltd. And United India Insurance Company… was provided capital of Rs 5,000 crore.
Who got how much fund?
Kolkata-based National Insurance Company Limited got the maximum amount of Rs 3,700 crore. After this Delhi-based Oriental Insurance Company Limited got Rs 1,200 crore and Chennai-based United India Insurance Company got Rs 100 crore.
Improvement in Solvency Margin
According to sources, these companies have been asked to improve their ‘solvency margin’ and meet the 150 per cent requirement under the regulatory regime. ‘Solvency Margin’ refers to capital adequacy. Higher ratio indicates better financial health and ability of the company to meet its future needs and business growth plans.
How much fund did the public sector companies get?
Except for New India Assurance, the ‘solvency ratio’ of other public sector general insurance companies is far less than 150 per cent of the regulatory requirement in 2021-22. For example National Insurance Company Ltd. It was 63 per cent in case of Oriental Insurance, 15 per cent in case of United India and 51 per cent in case of United India.
In the financial year 2019-20, the government had infused capital of Rs 2,500 crore in these three general insurance companies . Capital infusion of Rs 9,950 crore in 2020-21 and Rs 5,000 crore in 2021-22. That is, so far Rs 17,450 crore has been infused in these general insurance companies to improve their financial health.
