The government is deliberating on picking Chennai-based United India Insurance for privatisation, CNBC-TV18 has learned from some reliable sources.
The proposal to privatise United India Insurance is yet to get the nod of the group of ministers on disinvestment headed by Finance Minister Nirmala Sitharaman. Once that is done the proposal will come up for cabinet nod, sources say.
It is also likely that the government may move with the privatisation of the insurance company first, then public sector banks, as
the insurance law, The General Insurance Business Nationalisation Act, has been amended by Parliament to enable privatisation.
Among the key changes in the law, the government has agreed to dilute its stake in a general insurance company to below 51 percent and allowed management control to pass onto a private-sector board of directors.
As per IRDAI data, govt-controlled insurance companies have been consistently losing market share, particularly Oriental, National and United Insurance, while New India Assurance continues to be the undisputed market leader with an over 17 percent market share among the over 30 general insurance companies.
To prop up the solvency margins, the government so far has infused around 12500 crore of cash in the companies.
(Edited by : Aditi Gautam)
First Published: Aug 16, 2021 7:38 PM IST
