Govt bats for loss-making insurers, seeks regulatory forbearance

The government is in discussion with the insurance regulator Insurance Regulatory and Development Authority of India (IRDAI) seeking extension of special dispensation to the state-run general insurers for meeting solvency requirements.

National Insurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited are loss-making insurers. In the last two years, the government has infused more than Rs 12,500 crore in these three companies.

The regulator is concerned over the current financials of these firms and has sought more details from the government, said an official aware of the developments adding that the regulator is most likely to extend the forbearance. IRDAI has been headless since the last nine months, its last chairman Subhash C Khuntia stepped down in May 2021 on completion of his term.

As per, IRDAI all insurance companies need to maintain a surplus of 1.5 times the liabilities at all times. The solvency margin – the minimum margin of assets required by an insurer in excess of its liabilities – is like a bank’s capital ratios.

As per the latest available reports, United India solvency margin at end of September 2021 was 0.74%, while that of Oriental Insurance was 0.94%.

“The government has also issued directions to these insurers to further streamline their operations. We are hopeful that the regulator will extend the dispensation (for meeting solvency requirements) for next fiscal as well,” the above quoted official said.

Another executive aware of the developments said that the regulator wants to know if the government is ready to give capital to these loss-making firms. “An initial estimate had pegged the requirement at around Rs 5-6,00 crore,” he said adding that the government may like to strengthen the firm which it intends to privatise in order to get better valuation.

Finance minister Nirmala Sitharaman had in the FY22 budget speech announced the government’s intent to take up two public sector banks and one general insurance company for privatisation. The government has already notified the General Insurance Business (Nationalisation) Amendment Act which will allow the government to cut its stake in state-owned general insurers to below 51%.

The government is yet to firm up the name of the entity that would be taken up for privatisation. The NITI Aayog has said to have recommended the name of United India Insurance to the Core Group of Secretaries on Disinvestment headed by the Cabinet Secretary.

Note: This article have been indexed to our site. We do not claim legitimacy, ownership or copyright of any of the content above. To see the article at original source Click Here

Crock-Pot 20-Ounce Electric Lunch Box, Portable Food Warmer, Faded Blue, Perfect for Travel, Car, On-the-Go, Keeps Food Warm, Spill-Free, Dishwasher-Safe, Ideal Gift for Men and Women

(8208)

$34.99 (as of December 15, 2024 19:32 GMT +00:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)

Dickies Men's Dri-Tech Moisture Control Crew Socks, Available in M-XXL (6, 12, 18 Pairs)

(197403)

$10.98 (as of December 15, 2024 19:32 GMT +00:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)

Legendary Whitetails Men's Buck Camp Flannel, Long Sleeve Plaid Button Down Casual Shirt, Corduroy Cuffs

(91123)

$31.89 (as of December 15, 2024 19:10 GMT +00:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)

Bible Jar For Cancer Warrior, Cancer Care Gifts For Women, Cancer Gifts For Women, Breast Cancer Gifts, Cancer Comfort Gifts

(68)

$17.99 (as of December 15, 2024 19:10 GMT +00:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)

PULIDIKI Car Cleaning Gel Detailing Putty Interior Cleaner Slime Car Accessories Stocking Stuffers for Men Women Teens White Elephant Gifts for Adults

(5882)

$5.59 (as of December 15, 2024 19:32 GMT +00:00 - More infoProduct prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on [relevant Amazon Site(s), as applicable] at the time of purchase will apply to the purchase of this product.)