India’s publicly owned insurance companies, including New India Assurance, United India Insurance, Oriental Insurance, and National Insurance Company, are not expected to receive any capital injection from the Union government in the current fiscal year, as confirmed by a senior official from the finance ministry.
“There is no immediate requirement for capital infusion in non-life public insurance companies during this fiscal year. Their financial status remains relatively stable, and some of these insurers are performing well enough to even provide dividends to the government in FY24,” the official said
The official added that a reassessment of the need for capital infusion in these public insurers will be conducted in the following fiscal year, according to a Moneycontrol report. State-owned public sector undertakings (PSUs) traditionally allocate a dividend to the government, calculated as a portion of their post-tax profits.
Earlier reports indicated that the finance ministry was contemplating a supplementary capital injection of Rs 3,000 crore (US$362.9 million) during this fiscal year for three public sector general insurance companies facing losses. This move aimed to enhance their solvency ratio and meet the regulatory threshold of 150%.
Among the four state-run general insurance companies, only New India Assurance Company is publicly listed, while the remaining three are wholly owned by the government.
In the previous fiscal year FY22, the government infused Rs 5,000 crore (US$604.8 million) of capital into three insurers: National Insurance Company Limited, Oriental Insurance Company Limited, and United India Insurance Company.
The allocation was distributed as follows: National Insurance Company Limited received the largest portion of Rs 3,700 crore (US$447.6 million), followed by Rs 1,200 (US$145.1 million) crore for Oriental Insurance Company Limited, and Rs 100 crore (US$12.1 million) for United India Insurance Company.
Finance minister Nirmala Sitharaman had announced plans to privatize a general insurance company in the Budget for 2021-22, which remains pending at this time.
Elsewhere in the space, the Central Board of Direct Taxes (CBDT) of India has issued updated guidelines regarding income from life insurance policies with high premiums.
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