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Prudential can’t add Tata AIG stake, rules IRDA
The insurance regulator told Hindustan Times on Wednesday that if Britain’s Prudential Plc’s purchase of the Asian operations of bankrupt US-based American International Group (AIG) included the Indian stake in Tata AIG, it would amount to a regulatory violation, reports Falaknaaz Syed.
The insurance regulator told Hindustan Times on Wednesday that if Britain’s Prudential Plc’s purchase of the Asian operations of bankrupt US-based American International Group (AIG) included the Indian stake in Tata AIG, it would amount to a regulatory violation.
That might force a sell-back to the Tatas.
J. Harinarayan, chairman of the Insurance Regulatory and Development Authority (IRDA) said the Tata venture will not get special treatment as the same partner cannot hold stakes in two local ventures at the same time. Pru, as Prudential is called, has a thriving life insurance venture with ICICI.
However, the question may not arise because the Pru’s buyout of the Asian business may not include the Indian operations. The picture is not clear yet.
“As far as the Indian regulator is concerned, if AIG’s stake is bought out by Prudential, we will not permit it to hold stakes in two companies at the same time. Whatever is the course of action, it has to be decided by AIG, Tata Group and the prospective buyer,” Harinarayan said.
He confirmed that officials of Tata-AIG Life had met him on Tuesday to apprise him of the developments.
Harinarayan cautioned, “If you see Prudential’s statement, it says that AIG’s interest in China and India will be dealt with separately.”
The Tata Group has a life and as well non-life insurance joint venture with the now bankrupt AIG, which holds 26 per cent in each.
