Finance Ministry to take a call on PSU general insurers

Mumbai: The Parliamentary committee on public undertakings will be reviewingthe performance of all the four state-run non-life insurance companiesfor the fiscal year gone by physically on Monday that is September 13 in New Delhi.

The communique dated August 31 which has been seen by Bizz Buzz, sent by the Lok Sabha Secretariat to all the heads of state-owned non-life insurers, namely New India Assurance, Oriental, United India and the national reinsurer GIC Rementions that a briefing has to be made by them for the year gone by.

It will be followed by a briefing to be made by the representatives of Finance Ministry (Department of Public Enterprises) on the subject 'CorporateGovernance in CPSUs' on September 20. The government has merged the Department of Public Enterprises with Finance Ministry in July thisyear.

When enquired by Bizz Buzz, one of the heads of the state-run General Insurers said on condition of anonymity that "last time such a reviewmeeting was held in the year 2019 and due to Covid-19 it couldn't beheld in the year 2020."

The forthcoming meeting assumes significance in the wake of poorperformance by the state-run general insurer, NewIndia, and the national reinsurer GIC Re in the first quarter ofthe current fiscal. The other insurers are yet to announce their financial results for the period. While New India's net profit camedown by 62 per cent, GIC incurred net loss of Rs 558 crore in Q1.

In another development, the Lok Sabha, on August 2, passed a Bill thatwould allow the government to reduce its shareholding in state-ownedgeneral insurance companies. Finance Minister Nirmala Sitharamanintroduced the Bill which amends the General Insurance Business(Nationalisation) Act, 1972 in the Lok Sabha on July 30.

The law says that the central government will hold not less than 51per cent of the equity capital in a general insurer and the centre hasintroduced an amendment to drop this provision.