Mumbai: The government which is considering making draft amendments to insurance acts is not in favour of allowing the four public sector non-life insurance firms to list on the bourses mainly as the four public sector general insurance companies have over Rs1,000 crore of reserves each, officials said.
The draft amendments, prepared by the finance ministry, had proposed to amend the General Insurance Business Nationalisation Act to allow the four general insurers to raise equity capital from the market.
The finance ministry was considering to allow listing of the general insurance companies so that they have access to capital to meet solvency margins and also fund business expansion, including overseas.
The officials said that for FY07, National Insurance, which was earlier making losses, has shown improvement and the insurers have adequate reserves for expanding overseas operations.
Further there was also a move to bring down the minimum capital requirement for health insurance companies to Rs50 crore from Rs100 crore. The paid up capital of the public sector insurers in 2005-06 is Rs5 crore. Of the four PSUs, National Insurance reported a net loss of Rs106.25 crore in 2005-06, while Oriental reported lower net profits at Rs283.92 crore, New India and United have reported higher profits at Rs716.38 crore and Rs425.23 crore respectively.
As per IRDA norms, insurers have to maintain a required solvency margin (excess of the value of assets over the liabilities) of 1.5 times.
The draft amendments, prepared by the finance ministry, had proposed to amend the General Insurance Business Nationalisation Act to allow the four general insurers to raise equity capital from the market.
The finance ministry was considering to allow listing of the general insurance companies so that they have access to capital to meet solvency margins and also fund business expansion, including overseas.
The officials said that for FY07, National Insurance, which was earlier making losses, has shown improvement and the insurers have adequate reserves for expanding overseas operations.
Further there was also a move to bring down the minimum capital requirement for health insurance companies to Rs50 crore from Rs100 crore. The paid up capital of the public sector insurers in 2005-06 is Rs5 crore. Of the four PSUs, National Insurance reported a net loss of Rs106.25 crore in 2005-06, while Oriental reported lower net profits at Rs283.92 crore, New India and United have reported higher profits at Rs716.38 crore and Rs425.23 crore respectively.
As per IRDA norms, insurers have to maintain a required solvency margin (excess of the value of assets over the liabilities) of 1.5 times.
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