Minister of State for Finance Namo Narain Meena in a written reply to the Lok Sabha said all four PSU general insurers have been incurring underwriting losses over a period of time.
"It has been been felt necessary to contain the losses to improve their financial health ... Advisory instructions have been issued to them to achieve this objective through prudent underwriting and efficient claims management," Meena said.
The four PSU general insurers -- National Insurance, New India Assurance, Oriental Insurance and United India Insurance -- have together paid Rs 168 crore as dividend in 2011-12 fiscal.
The dividend received in 2010-11 was Rs 30 crore, and in 2009-10 was Rs 270 crore, he said.
Meena further said there was no proposal before the government to list the PSU general insurance companies.
In a separate reply, Meena said the insurance regulator IRDA has been examining the proposal to hike investment limit of largest insurer LIC.
"The proposal has been under examination of IRDA and it has been requested to re-consider the proposal afresh keeping in mind the problems being faced by LIC and policyholders protection," Meena said.
As per the norms of the Insurance Regulatory and Development Authority (IRDA), insurers can hold up to 15 per cent equity in any company.
Meena said the fund size of LIC has increased from Rs 1.5 lakh crore in 2000 to nearly Rs 13 lakh crore in 2012, accounting for 80 per cent of the total industry size.
He said in order to ensure better returns on investment of policyholders, the government is re-examining the investment policy for LIC for protection of customers and to provide better investment opportunities.