1. Home
2. Letters

Budget-provision of 2018-19 for merger of public-sector General-Insurance companies be implemented

Kashmir Times. Dated: 7/18/2019 12:04:55 PM

Dear Editor,
It refers to provision to amend General Insurance Business Nationalisation Act as announced in the Union Budget for the year 2019-20 for merging three out of four public-sector companies engaged in General Insurance, while there was a provision for the same in earlier Union Budget for the year 2018-19. It is noteworthy that National Insurance Company, Oriental Insurance Company and United Insurance Company showed heavy losses till the year 2016-17 with only New India assurance Company showing adequate profit in both the fiscal years at rupees 1008 crores and 2201 crores respectively.
If one single public-sector Life Insurance Corporation of India (LIC) provides life-insurance cover under so many plans effectively, then one General Insurance Corporation of India can also be formed by merging all public-sector Insurance-companies engaged in General Insurance rather than just three out of four. Such unified company will be able to compete more effectively with private-sector companies engaged in General Insurance in the manner that no private Insurance-company is presently able to compete with public-sector Life Insurance Corporation of India. Merger will save huge overheads including rent on nearing units and top officers.
—Subhash Chandra Agrawal,
1775 Kucha Lattushah Delhi.