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Two of the insurance giants of India HDFC Life and Max Life both founded in 2000, are looking forward to
Earlier, Max Life had sought to merge with Max Financial which would ultimately merge with HDFC Life. However, the amalgamation would have contravened section 35 of the Insurance Act, according to which an insurance company cannot merge with a non-insurance company. Hence, although the amalgamation proposal was approved by the Board, it stood unapproved by the insurance regulator for its contravention with the law. Now, as per the reports, the structure has been re-worked upon and the Board is to meet on 17th of July to take a final decision and a fresh scheme will be presented before Insurance Regulatory Development Authority of India (IRDAI).
After the Board meeting, if the decision is positive, a fresh merger scheme will be presented before IRDAI. However, if the decision is negative, the amalgamation plans of the companies will be kept on hold for the future. Meanwhile, HDFC Life will go ahead with their earlier option of initial public offering (IPO) for which in the previous year the firm had appointed merchant bankers who were to start preparing for an IPO.
As per the new structure, HDFC Life and Max Life will see an amalgamation. If all goes well, the merger is expected to become the largest private-sector insurer in India.
(Source and Credits: Live Mint)