During the current quarter, the Ministry of Finance will infuse Rs 3000 crore into them to improve the health of government general insurance companies. Last year, the Union Cabinet chaired by PM Modi approved the proposal to infuse capital into National Insurance, Oriental Insurance and United India Insurance.
Apart from this, the proposal to increase the authorized share capital of National Insurance Company Limited (NICL) to Rs. 7500 crore and to increase the authorized capital of both United India Insurance Company Limited, Oriental Insurance Limited to Rs. 5000 crore were also approved in this cabinet meeting.
Recently, the government had sought Parliament’s approval on gross additional expenditure of 6.28 lakh crore for 2020 and 2021 as the second and final supplementary demand for grants. Of this, Rs 3000 crore is in the form of additional funds related to the recapitalization of insurance companies.
This process of infusion of capital into insurance companies will be done on March 8, after the Parliament passes a proposal for supplementary grants. This capital infusion will help the three general insurance companies mentioned above to strengthen their financial and solvency positions and will be able to meet their insurance needs.
Finance Minister Nirmala Sitharaman had said in her budget speech that 2 public banks and 1 general insurance company will be privatized in FY 2021-22. Explain that in 2017, 2 government general insurance companies New India Assurance Company and General Insurance Corporation were listed in the market.