The government is in discussion with IRDAI seeking extension of special dispensation to the state-run general insurers for meeting solvency requirements.
National Insurance Company Limited, Oriental Insurance Company Limited and the United India Insurance Company Limited are loss-making insurers. In the last two years, the government has infused more than Rs 12,500 crore in these three companies.
The regulator is concerned over the current financials of these firms and has sought more details from the government, said an official aware of the developments adding that the regulator is most likely to extend the forbearance. IRDAI has been headless since the last nine months, its last chairman Subhash C Khuntia stepped down in May 2021 on completion of his term.
As per, IRDAI all insurance companies need to maintain a surplus of 1.5 times the liabilities at all times. The solvency margin – the minimum margin of assets required by an insurer in excess of its liabilities – is like a bank’s capital ratios.
