News eDaily08 Jun 2017

India:Govt nonlife insurer given 2 years to improve solvency

08 Jun 2017

The insurance regulator IRDAI has given state-owned insurer National Insurance until 31 March 2019 to improve its solvency ratio to 150% and then launch an initial public offer.

Company officials though expect that they would reach a solvency ratio of 150% for the financial year ended 31 March 2017, the results of which are set to be announced in the next few weeks.

A senior official of the company told Moneycontrol: "Once the results, which are currently under government audit, are finalised, and the accounts are closed, we will start our preparations for the initial public offering," he added.

As per IRDAI rules, solvency has to be maintained at 150% at least at all times, before an insurer sends a listing proposal to the regulator for approval.

National Insurance is among the public-sector general insurers that have been selected for an IPO. This financial year, New India Assurance and GIC Re are expected to list.

National Insurance's solvency stood at 131% for the quarter ended 31 December 2016.

The insurer has requested IRDAI to permit it to consider its real estate assets as a portion of the company's fair value. This will help improve solvency.

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