Policyholders can now inspect insurers? M&A proposals

Policyholders’ will have the right to inspect merger and acquisition proposals for general insurance companies after they receive an in-principal approval from the regulator. Merging entities will also have to cite a reason for the acquisition or merger proposal.

After a company submits a proposal for a merger or an acquisition, the Insurance Regulatory & Development Authority (Irda) may ask insurers to send a copy of the application to all its policyholders. Customers of non-life companies range from large corporates who have bought industrial covers to an illiterate driver in rural India, who buys a motor cover.

Irda has prepared a draft exposure for schemes of arrangement and transfers of non-life insurance business and intends to incorporate it in the Insurance Amendment Bill of 2008. This is because there are no guidelines for mergers and acquisition of non-life companies under the present set of rules and Acts.

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