M&A norms for insurers by March

The insurance regulator, Insurance Regulatory & Development Authority (IRDA), will release a framework for mergers and acquisitions among insurance companies by March end. Falaknaaz Syed reports.

The insurance regulator, Insurance Regulatory & Development Authority (IRDA), will release a framework for mergers and acquisitions among insurance companies by March end. The guidelines will ensure that the interests of the policyholders are well protected.

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Speaking at the ASSOCHAM on pension and retirement planning, IRDA Member (Actuary), Dr R Kannan said, “Once private life insurance companies start making profits, there could be some players who may look at selling their business at a premium sale.”

“The M&A guidelines will look at several aspects such as the liabilities of the insurance company which is being acquired on day of closing.”

The regulator will also ensure that the assets of the company are ring fenced and that the management has enough cash flow to pay for the liabilities of its last policyholder. Adequate attention will also be paid to corporate governance and disclosure standard, he said.