The Insurance Regulatory and Development Authority (IRDA) is working on schedule to launch merger and acquisition (M&A) norms by the end of March that would facilitate consolidation in the sector. The guidelines for merger and acquisition would be ready by March-end, IRDA member actuary R Kannan said at a seminar organised by Assocham here.
The regulator is looking at various aspects of M&A with regard to protection of interest of shareholders as well as policyholders. Besides evaluation and protection of assets,the regulator will also look at the liability of the company as on the day of closing. One of the important aspects is management of cashflow and make a projection so that money is available till the last policy holder exits, said Kannan.
However,the regulator would not dictate the price but rather insure that the whole process is transparent and policyholders and shareholders take an informed decision. The norms would have a portion of asset and liability valuation,corporate governance and transparency,Kannan added. At present,there are no specific guidelines for M&A in insurance sector in the country.