Insurance Current Affairs - 2019

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GoI merges three Insurance PSUs

The GoI will merge 3 public Sector Insurance Companies as announced in budget 2019-20. The merger includes United India Insurance Limited, National Insurance Co Limited and Oriental Insurance Company Limited.

Highlights

  • The Budget 2019-2020 did not make provision of funds for insurers and the Department of Financial Services. Therefore, the government institutions in the financial sector are forced to seek supplementary demands to fulfil their purposes. The Budget allocated Rs 12,000 crore for this.
  • The General Insurance Companies have sought Rs 500 crore to Rs 3000 crore each to avoid falling below solvency ratio. However, the three companies that are to be merged are struggling to maintain minimum solvency ratio of 1.5

Laws on solvency Ratio

According to the Guidelines of Insurance Regulatory and Development Authority of India, an insurance company has to compulsorily maintain a minimum solvency ratio of 1.5.

The solvency ratio is calculated by dividing company’s tax net operating income by its total debt obligation. The ratio indicates if the enterprise is able to meet its debt obligations. The lower the ratio, the greater is its probability to default its debt obligations.

Monster Salary Index Report

The Monster Salary Index report has highlighted the following findings:

  • The gender pay gap is still high in India and women in the country earn 19 per cent less than men.
  • Wage inequalities in favour of men are present in all the relevant sectors.
  • The current gender pay gap in India stood at 19 per cent where men earned Rs 46.19 more per hour in comparison to women.
  • The survey report puts the median gross hourly salary for men in India in 2018 stood at Rs 242.49, while for women it stood at around Rs 196.3.
  • Gender pay gap encompasses across key industries, IT/ITES services showed a sharp pay gap of 26 per cent in favour of men, while in the manufacturing sector, men earn 24 per cent more than women.
  • Even in sectors like healthcare, caring services, and social work which are notionally identified with women, men earn 21 per cent more than women.
  • Only in Financial services, banking and insurance industry men earn just 2 per cent more.
  • The report notes that the gender pay gap widens with the years of experience. In the initial years, the gender pay gap is moderate but rises significantly as the tenure increases and for those with over 10 years of experience, the gender pay gap in favour of men reaches the peak, with men earning 15 per cent more than women.
  • The survey reports that the gap has narrowed only by one per cent in 2018 from 20 per cent in 2017.

Monster Salary Index Report was prepared by Monster India in collaboration with Paycheck.in (managed by WageIndicator Foundation) with IIM-Ahmedabad as a research partner.