IRDA releases norms for merger of general insurance cos

After more than ten years of opening up of insurance sector, IRDA has allowed mergers and acquisitions among the industry players. Out of 24 industry players, many are making loss for want of capital.

The private insurance companies have FDI, which is capped at 26 percent. The general insurance business is lagging because of lack of capital.

The bill to raise the FDI ceiling is pending in the parliament.

To protect the interests of policy holders in case of mergers and acquisitions, the IRDA said, “the transacting parties shall ensure that policyholders of the transferor entity are migrated in a manner which ensures that their existing policies are continued to be serviced by the transferee entity on terms and conditions no less favorable than those existing prior to the merger.”

More Info - http://irda.gov.in/ADMINCMS/cms/Circ...age=PageNo1058

Why there is late for general insurers? It's already there for Life Insurers.