Chennai, March 9 (IANS) - HDFC Standard Life Insurance Company Ltd. has not revised to the insurance regulator the proposed merger structure of Max Life Insurance Company Ltd. with itself, a top official of the former company said. He said the private life insurer company is hoping to get a positive reply to the merger proposal from the Insurance Regulatory and Development Authority of India (IRDAI) in 30 to 40 days. In an interview to BTVi, Amitabh Chaudhary, Managing Director, HDFC Standard Life, said there is no change in the merger structure proposed to IRDAI.
He said the objection to the original merger proposal was that an insurance company can merge with another insurance company but in the case of HDFC Standard Life and Max Life Insurance two other entities are involved. "We have represented to the IRDAI and they have given us a patient hearing," Chaudhary said.
He did not agree that the merger proposal has got stuck with the IRDAI as the file has to be seen by several people and is taking slightly more time than it was anticipated, he observed.
Earlier, it was announced that the insurance business of HDFC Standard Life and Max Life Insurance will be merged through a composite scheme of arrangement involving three entities. First Max Life will be merged into Max Financial Services. The shareholders of Max Life will get one share of Max Financial Services for approximately five shares of Max Life.
"For the demerger of the life insurance undertaking from Max Financial Services into HDFC Life, shareholders of Max Financial Services (post the amalgamation with Max Life), will get 2.33 shares of HDFC Life for each share of Max Financial Services," HDFC Standard Life said in a statement earlier.
According to HDFC Standard Life, the merged life insurance company will pay a non-compete fee to the promoter group of Max Financial Services. HDFC Standard Life has also entered into a Trademark License Agreement to use the Max brand as part of life products that will transition from Max Life, for seven years post completion of the proposed transaction.
HDFC Ltd and Standard Life (Mauritius Holdings) 2006 Ltd will be the promoters of HDFC Standard Life the merged entity, post completion of the proposed transaction. Upon obtaining all approvals, when the scheme becomes effective, the following steps will occur in that order:
- Max Life will merge into Max Financial Services
- Demerger of the life insurance undertaking from Max Financial Services into HDFC Standard Life (ie, the merged insurance entity)
- Merger of Max Financial Services (holding the residual business) into Max India.