The invoice, cleared by the finance ministry and awaiting clearance in Parliament, amends Part 35 of the Insurance coverage Act to permit a non-insurance firm to merge into an insurance coverage firm with Insurance coverage Regulatory and Improvement Authority of India’s approval.
“In our case, the corporate we plan to merge with is just a holding entity with out an working steadiness sheet, so we do not foresee any points,” mentioned Prashant Tripathy, MD and CEO, Axis Max Life in an unique interplay with ET.
As soon as enacted, the NCLT-led merger course of is predicted to take 8 to 12 months, together with regulatory clearance, a supply mentioned.
The insurance coverage regulator shaped the Dinesh Khara Committee to draft guidelines on the amendments, and the committee has additionally really helpful that any proposed merger ought to proceed solely with express regulatory approval.
The necessity for modification arose with Shriram Group’s bid to merge its insurance coverage enterprise with its non-insurance holding firm. It uncovered a authorized gray space the federal government is now shifting to handle with this modification. Underneath the present Insurance coverage Act, mergers are explicitly allowed solely between insurers, leaving mixtures with non-insurance companies open to interpretation.
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