Capital Support for State-Owned General Insurers: Rs 3,000 Crores to be infused

The Finance Ministry has decided to infuse Rs 3,000 crore capital into the state-owned general insurance companies in the current quarter.

Key Facts

  • The capital will be infused in order to improve the financial health of the insurers.
  • In the recent move, government also looked after the Parliamentary nod for gross additional expenditure of Rs 6.28 lakh crore for the financial year 2020-21. This amount was demanded as a part of second and final batch of supplementary demands for grants.
  • It also included Rs 3,000 crore to provide the additional funds to recapitalise the insurance companies.
  • The infusion of Rs 3000 crores will be done after the supplementary demands of grants is passed by Parliament in March.


  • This decision was taken in the backdrop of the proposal cleared by the Union Cabinet headed by Prime Minister Narendra Modi to provide the capital support to National Insurance, United India Insurance and Oriental Insurance.
  • Union cabinet had also decided to increase authorised share capital of the insurers.
  • The share capital had to be increased to Rs 7,500 crore for National Insurance Company Limited (NICL). While, it had to be increased to Rs 5000 crore for each of United India Insurance Company Limited (UIICL) and Oriental Insurance Company Limited (OICL).

How this infusion will be utilised?

Capital infusion for the insurers will help three public sector general insurance companies to improve their financial and solvency position. It will also help the insurers to meet the insurance needs of economy. The infusion of the capital will also help in absorbing the changes and enhancing the capacity to raise the resources. Lastly, it will help in improving the risk management.

National Insurance Company Limited (NICL)

It is a state-owned general insurance company. The tagline of the company is “Trusted Since 1906”. It is headquartered at Kolkata. NICL was established by Gordhandas Dutia and Jeevan Das Dutia in 1906. NICL also serves in Nepal.




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