NIC, OIC, UII merger: Tenders for appointment of external agency to be notified soon, say sources
The consultant will also be responsible to look into the balance sheet, IT and employees of these companies. The government wants to complete the merger process in the ongoing financial year. However, before kicking-off the merger of these PSU GICs, the government will have to amend the existing General Insurance Business (Nationalization) Amendment Act 2002.
The Finance Ministry is likely to meet on April 23, 2018, to decide the fate of merger of the three Public Sector General Insurance Companies (GICs) — National Insurance (NIC), Oriental Insurance (OIC) and United India Insurance (UII). Earlier, the CMDs of these companies had met finance ministry officials. Sources familiar with the development informed Zee Business's Anurag Shah that "tenders for appointment of external consultant agency will be notified after the meet that is scheduled to happen on April 23, 3018. The consultant will be responsible for preparing strategies for the merger of the GICs and simplify the issues related to it."
The consultant will also be responsible to look into the balance sheet, IT and employees of these companies. The government wants to complete the merger process in the ongoing financial year. However, before kicking-off the merger of these PSU GICs, the government will have to amend the existing General Insurance Business (Nationalization) Amendment Act 2002.
Also, according to sources, before starting the merger process, government will have to close a number of existing insurance products of these companies. IRDA's approval is required to stop existing insurance products.
In addition, with this merger, the number of regional offices of these companies will go down to 45 from existing 90, but there will be a goal to reach in the far-flung areas of the country by opening new branches in those areas.
Watch this Zee Business video on public GICs
Besides, the government may come up with a proposal that seeks to bring Voluntary Retirement Scheme for 5000 to 7000 employees. At present, the number of employees in 3 companies is about 45,000.
Background
Finance minister Arun Jaitley had proposed the merger of these three PSU general insurers in the Union Budget on February 1, 2018. In his budget speech, the finance minister said that the unified entity is likely to be listed on the stock exchanges. Financial weakness is one of the reasons that led to the decision on the merger of these GICs.
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