New Delhi, 12 February: The Union Cabinet has announced Rs 2,500 crore capital infusion for three state-owned public sector general companies — Oriental Insurance Company Limited (OICL), National Insurance Company Limited (NICL) and United India Insurance Company Limited (UIICL) — to help them improve their operations.
During the press briefing, Minister for Information and Broadcasting, Prakash Javadekar, said, “These general insurance companies will get Rs 2,500 crore so that their solvency ratio becomes acceptable, and they will fulfill the norms of IRDA.”
Later, the cabinet in an official statement clarified that the release of Rs 2500 crore has been made in light of critical financial position and breach of regulatory solvency requirements of OICL, NICL and UIICL.
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In the 2018-2019 budget, a proposal was made to merge the three general insurance companies to boost its financial health, which the cabinet had approved two years later. Their merger has now been proposed by the end of March 2020.
The move by the cabinet comes in the aftermath of FY21 budget announcement to divest Life Insurance Company (LIC), which is expected to become the country’s largest company by market value on the basis of assets under management (AUM) when it goes public.
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