Friday, September 17, 2021
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Cabinet Clears amendments for privatisation of general insurance firm

The cabinet has approved amendment to the General Insurance Business (Nationalisation) Act, 1972 paving way for privatisation of one state-run general insurer.

“The cabinet approval has come. Now the bill may be presented in this session of the Parliament,” said a government official adding that the amendments seek to allow bring down government holding to below 51% and transfer of management control to private player in case of shortlisted firm.

In her budget speech this year finance minister Nirmala Sitharaman had said that the government will take up two public sector banks and one general insurance company for privatisation in FY22.

At present there are four state run general insurance companies – National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited.

According to reports, NITI Aayog which was to recommend suitable candidate for privatisation have suggested the name of United India Insurance to the Core Group of Secretaries on Disinvestment headed by the Cabinet Secretary.

Last year, the government had provided capital support to National Insurance, Oriental Insurance and United India Insurance to meet regulatory requirement and increase the authorised share capital of National Insurance Company Ltd (NICL) to Rs 7,500 crore and that of United India Insurance Co Ltd (UIICL) and Oriental Insurance Co Ltd (OICL) to Rs 5,000 crore each.

The government has budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions during 2021-22.

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