The Department of Financial Services (DFS) has confirmed that there is no decision yet to merge the public sector general insurance companies. DFS Secretary M. Nagaraju made this clear on May 5 during an event in Mumbai.
Speaking at the listing ceremony of the first Residential Mortgage-Backed Securities, Nagaraju said, “No decision has been taken to merge the PSU insurers. When the policy decision is taken, we will come out with it.”
There were recent reports in the media that the government is mulling the idea of clubbing four state-owned general insurers—New India Assurance, National Insurance, Oriental Insurance, and United India Insurance—into one consolidated company. According to these reports, the idea is to form a large general insurance company akin to LIC to take on the private insurers and extend the scope of insurance in the country.
The proposal to merge these insurance companies was originally put forward in the FY2018 Union Budget. It was hoped to make the sector competitive and efficient. In FY2022, the government think tank NITI Aayog even proposed that United India Insurance be privatized. Yet that proposal has not gained traction as yet.
Currently, the administration has indicated that no decision has yet been reached and that an official action will be announced only after proper policy approval.
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Source: Moneycontrol.
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