The government is looking to establish a mega state-run general insurer under New India Assurance, reported The Economic Times, adding that with this, the centre could be possibly revising an earlier plan of having two such companies.
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Discussions are underway between Department of Financial Services and Department of Investment and Public Asset Management for the same, ET reported on Friday, citing a government official.
As announced in the 2019 interim Budget, the government's initial plan was to merge the state-owned insurers Oriental, National and United Insurance into one entity, keeping New India Assurance separate, said the report.
India has 25 insurance companies, out of which four are state-owned companies.
“There are already so many private sector entities operating in this sector… Why should two large state-run firms undercut each other’s business,” said the official cited above," the government official was quoted as saying in the report.
“If we first merge the three and then New India acquires this firm… This option can also be looked at,” another official aware of the development told ET. “This will depend on the financial strength of New India and the government may raise some proceeds in the process.”