Monday, November 20, 2017

Regulator opposes merger of Indian life firms

Max Life Insurance and HDFC Standard Life are now exploring other merger options after the Insurance Regulatory and Development Authority of India (Irdai) disapproved the proposed merger.

Irdai said the current structure of the proposed merger violates Section 35 of the country’s Insurance Act, which bars the merger of an insurance firm with a non-insurance company.

In a filing at the stock exchange, Max India confirmed that Irdai has reaffirmed its original position against the merger based on Section 35 of the Insurance Act.

HDFC Life and Max Life, however, said they remain committed to the merger and are evaluating other possible options.

The original plan was for Max Life to first merge with its parent company Max Finance Services, then the life  business will be de-merged from Max Financial and merged into HDFC Life.

The structure, however, did not get the approval of Irdai.

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