National Insurance & Oriental Insurance & United Insurance merger halted by Modi govt
Prime Minister Narendra Modi also decided to Insurance Merger share capital of National Insurance Company Limited to Rs 7,500 crore.
The Union Cabinet on Wednesday decided to halt the merger process of three state-owned general insurance companies.
National Insurance & Oriental Insurance and United India Insurance, for the moment & approved fund infusion of Rs 12,450 crore to improve their financial health.
The cabinet PM Narendra Modi also decided to increase the authorized share capital of (NICL) to Rs 7,500 crore.
(UIICL) & Oriental Insurance Company Limited (OICL) to Rs 5,000 crore each to give effect to the capital infusion decision.
The Rs 12,450 crore capital infusion approved by the Cabinet includes Rs 2,500 crore provided to these companies during 2019-20.
The government in Budget 2020-21 had made a provision of Rs 6,950 crore for capital infusion.
Three insurance companies in order to maintain the requisite minimum solvency ratio.
Briefing reporters about the Cabinet meeting, Minister of Information & Broadcasting that recapitalization will make the government-owned insurance companies more stable.
The government has issued guidelines in the form of KPIs aimed at bringing business efficiency and profitable growth.
The capital infusion, it added, will enable the three public sector general insurance companies to improve their financial.
Solvency position, meet the insurance needs of the economy, absorb changes & enhance the capacity to raise resources & improve risk management.
In the Budget 2018-19 speech, the then Finance Minister Arun Jaitley & announced that the three companies would be merged into a single insurance entity.
The process of merger due to various reasons, including poor financial health of these companies.
In 2017, state-owned companies New India Assurance Company & General Insurance Corporation of India went public.
Union Cabinet decided to halt & merger process
Modi government halted the unification of Three State-owned general insurance companies, namely National Insurance, Oriental Insurance, and United India Insurance for the moment & authorized fund infusion of Rs 12,450 crore to enhance their financial condition.
the cabinet headed by Prime Minister Narendra Modi to raise the authorized share capital of National Insurance Company Limited ( NICL)
Oriental Insurance Company Limited (OICL) to Rs7,500 crore and Rs5,000 crore respectively, so as to provide effectiveness to the decision of capital infusion.
The cabinet approved capital infusion of Rs12,450 crore includes Rs2,500 crore provided to these insurance companies during 2019 -20, adding Rs 3,475 crore will be released right away & the balance Rs6,475 crore will be infused afterward in one or more divisions.
While briefing reporters about the cabinet meeting told that recapitalization will. make the government-owned insurance companies more steady.
The three public sector general insurance companies in amending their financial.
The capital infusion, it added, will enable the three public sector general insurance companies to improve their financial and solvency position, meet the insurance needs of the economy, absorb changes and enhance the capacity to raise resources and improve risk management.
In 2017, state-owned companies The New India Assurance Co. Ltd. and General Insurance Corporation of India Ltd. we
Aim is to develop comprehensive reform agenda in six themes to modernize public sector GICs. Committed to work towards safety net of all citizens.