Govt rules out merger of 3 general insurers

Mumbai: The Government will not merge the three state-run general insurers-Oriental Insurance Company (OIC), National Insurance Company (NIC) and United India Insurance (UII) into one entity. Replying to an unstarred query on the floor of Parliament in New Delhi on Monday, Union Minister of State (MoS) for Finance, Dr Bhagwat Karad, said: "Government has decided to infuse capital, focus on growth and not to proceed with merger." It was in the Budget proposal in 2018 in which it had been announced to merge the three public sector general insurance companies. The question in connection with the proposed merger was raised by an MP, Subbarayan K.

From time to time, association of employees of public sector general insurance companies submit their demands of their employees and suggestions for strengthening them. The suggestions received have included suggestions in respect of merger of these companies. The speech of the finance minister on the Budget for the financial year 2018-19 announced the government's intent to merge three public sector general insurance companies. The employees of public sector general insurance companies (PSGIs) want more capital infusion in PSGI companies and they had reiterated their demand of merging all four public sector general insurance companies-Oriental, New India, National and Unitedin the interest of the nation and the common man. Save for New India, all the remaining three general insurers are having their solvency margin less than the regulatory requirement of1.5.

While introduction of Insurance Privatisation Bill in 2002, on the floor of Parliament the then Govt vociferously announced to strengthen the public sector companies, the employees and the progressive section of the country have been demanding merger of the state-run General insurance companies to avoid rate cutting and inter-company competition for better and effective functioning but the current establishment is more in favour of privatisation of the non-life insurance companies. In her budget proposals on February 1, 2021, Union Finance Minister, Nirmala Sitharaman, had proposed privatisation of one general insurance company in FY 2021-22. Various media reports have been saying for privatisation of one or the other PSGI companies.