The government wants a fresh scrutiny of the proposed merger of three state-run insurance companies, a step which means that the final decision will be taken by the new government which assumes office after the 2019 elections.
The Department of Investment and Public Asset Management (DIPAM) has asked the Department of Financial Services (DFS) to have the issue of the merger of three state-owned insurance companies examined and to prepare a fresh roadmap. There is a view within the government that the issue needs to be thoroughly examined before rushing into a merger, reported Times of India.
Consultancy firm EY has been shortlisted to advise on the proposed merger. “If the terms of reference have not been finalised, they can be asked to look at all the issues or else the DFS can appoint another consultant to undertake the review,” said a DIPAM official, who did not wish to be identified.
The official said all issues including value for stakeholders from the merger would be examined.
Finance Minister Arun Jaitley in his Budget speech last February had said that the three public sector general insurance companies—National Insurance, United India Assurance and Oriental India Insurance—will be merged into a single entity which will be listed subsequently.