The Cabinet Committee
on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi
has given its ‘in principle’ approval for listing the following five
Government owned General Insurance Companies in the stock exchanges.
(i) The New India Assurance Company Ltd.
(ii) United India Insurance Company Ltd.,
(iii) Oriental Insurance Company Ltd.,
(iv) National Insurance Company Ltd. and
(v) General Insurance Corporation of India.
The shareholding of these Public Sector General Insurance Companies (PSGICs)
will be divested from 100 percent to 75 percent in one or more tranches
over a period of time. During the process of disinvestment, existing
rules and regulations of Securities and Exchange Board of India (SEBI)
and Insurance Regulatory and Development Authority of India (IRDAI) will
Listing of (PSGICs) is likely to yield the following benefits:
a. Listing on the Stock Exchange necessitates compliance with a number
of disclosures and accounting requirements of SEBI, which acts as an
additional oversight mechanism. The disclosures bring about transparency
and equity in the companies functioning.
b. Listing is expected to lead to improved corporate governance and risk
management practices leading to improved efficiency. A greater focus on
growth and earnings can also be expected.
c. Listing will open the way for the companies to raise resources from
the capital market to meet their fund requirements to expand their
businesses, instead of being dependent on the Government for capital
The Finance Minister in his Budget Speech for 2016-17 had announced that
public shareholding in Government-owned companies is a means of ensuring
higher levels of transparency and accountability; and to promote this
objective, the general insurance companies owned by the Government will
be listed on the stock exchanges.