SJM co-convenor Ashwani Mahajan said on Thursday that if the government followed its plan, it would unsettle four key government insurance schemes.
Blaming the poor performance of the loss-making units on disinterest of private companies in social schemes, Mahajan said, "In case of Pradhan Mantri Fasal Bima Yojana, more than 50% of the drought-prone area is being serviced by four PSGICs, making combined losses worth 115%, whereas private players are servicing the better parts of country which have much less risk of loss."
Hitting out at private players, Mahajan wrote: "It is estimated that Pradhan Mantri Suraksha Bima Yojana, which is a personal accident policy for unorganised workers, 90% of the business is done by PSGICs at a loss ratio of 221% whereas PSUs are mandated to offer these policies and private players are choosing not to service this huge loss-making scheme."
The three public companies are Oriental Insurance Co Ltd and United Insurance Co Ltd and National Insurance Co Ltd.
Advising against the merger, the Sangh affiliate suggested 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 as solutions.
Calling PM Modi's leadership "visionary", Mahajan urged the government to not go ahead with the said merger.
( With inputs from IANS )