SJM writes to PM Modi against proposed merger of Public Sector General Insurance Companies

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Swadeshi Jagran Manch (SJM wrote to Prime Minister Narendra Modi requesting him to not to permit proposed merger of three Public Sector General Insurance Companies (PSGICs) saying that it shall have negative impact on “very ambitious schemes” including Pradhan Mantri Jan Aarogya Yojana (PMJAY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Fasal Bima Yojana (PMFBY) and PMJJBY.

“This letter has reference to the proposed merger of Oriental Insurance Co Ltd and United Insurance Co Ltd and Insurance Co Ltd, in one new entity, which is likely to endanger growth of insurance sector in the country in general and the flagship insurance-based social schemes initiated by your Government in the past 5 years,” read the letter undersigned by co-convenor, Dr Ashwani Mahajan.

Referring to several schemes initiated by the NDA government, the letter read: “If these public sector enterprises start turning away from socially desired insurance, similar to private sector companies, what will happen to the flagship insurance schemes started by the government under your leadership and the public outcry resulting thereof.”

“Further, we wish to put on record that PSUs are the ones servicing most of the claims under Motor Third Party Insurance in far-flung rural areas of the country where private players do not want to enter,” said Mahajan in his letter.

Asserting that the organisation agrees that these companies have to “stop bleeding”, the letter said the solution lies not in merger but in other areas such as reviewing the efficiency of staff, eliminating vested interest in payment of commissions for generating business, prudent premium charging policy keeping in view the claims settled and examining some government support in payment of claims in social sector schemes on the lines of payment of insurance premium.

“We once again remind you that existence of the public sector insurance companies is key to the successful implementation of socially important flagship insurance schemes initiated under your visionary leadership,” the letter read.

 

 

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TheDispatch Staff