At a meeting held on Wednesday, the Union Cabinet cleared the public listing of five state-run general insurance companies.
"In a major decision on the five general insurance companies — New India Assurance Co, United India Insurance, Oriental Insurance, National Insurance Company and the holding General Insurance Corporation — the Cabinet decided that all these would be publicly listed," Finance Minister Arun Jaitley told reporters after the meeting.
The divestment will bring down the government's holding in the insurers to maximum 75 percent, in compliance with SEBI and IRDA guidelines.
The finance ministry said in a statement that the listing will bring about transparency in the insurers' functioning.
"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 a capital infusion," the ministry said.