NOUN's all-India general secretary, Amrish Sinha said: "We want a merger of GIC's four subsidiaries - National Insurance, Oriental Insurance, United Insurance, and New India Assurance. All these subsidiaries were previously under GIC, but the Poddar Committee appointed by the finance ministry recommended a demerger of the four companies to allow them to work independently".

Mr Sinha is of the view that with the opening up of the insurance sector to private players, there is no reason for the four subsidiaries to compete with each other anymore. "Put together, the four companies have great financial strength and will be a corporate entity to reckon with. The general insurance industry as a whole has been able to achieve this strength while consistently contributing to the exchequer in better ways than many other financial institutions in the country," he said.

The officers' union said that the feasibility of the four autonomous state-owned companies competing with each other as well with private players is highly doubtful. Consolidation is cited as a key factor, and the union feels that it would be unwise on the part of four general insurance companies to try their luck as individual players. A merger of the four companies is advocated on the grounds that it will lead to a stronger financial entity with greater leveraging potential. It will drastically reduce costs and will also help pool individual skills and talents built up by the companies over the years.

Mr Sinha was of the view that the Poddar Committee report did not offer acceptable solutions. "It is made up of a group of people about to retire, who intend to start their careers afresh with new private companies. This they hope to do by sabotaging the four companies for whom they are working right now," he said.