Parl panel expresses concern over financial health of insurance firms
New Delhi, March 23, 2023
A Parliamentary panel has expressed concern about the financial health of General Public Sector Insurance Companies.
"The Committee are concerned about the financial health of General Public Sector Insurance Companies, as despite measures such as focusing on pursuing profitable business including motor and health portfolio, improving risk management practices, monetising the commercial and residential assets not in use, modernising and upgrading IT systems, capital infusion etc., the desired results do not seem to be appearing," said the Demand for Grants report (2023-24) by Standing Committee on Finance.
The parliamentary panel has said in the report that the solvency position of three major Public Sector General Insurance Companies (PSGICs) namely National Insurance Co. Ltd, United India Insurance Co. Ltd and Oriental Insurance Co. Ltd is still strained.
It is concerned that with the tweaks in the slabs and rates in the New Tax Regime, there might be a decline in life insurance penetration in the country as a major chunk of the population invests in life insurance products as tax saving instruments, which is also the most important source of loanable/investment fund in the economy, said the report.
The Committee also urge that a comprehensive study be undertaken to evaluate the impact of opening up of the insurance sector, so that any changes, if needed, can be made to the act governing the Insurance sector, said the panel report.