August 1, 2017 2:40:18 am
Max India on Monday called off the proposed merger between Max Life and Max Financial Services with HDFC Standard Life Insurance due to inordinate delays. “Max Financial Services (MFS), Max India and Max Life today confirmed that the proposed merger with HDFC Life has been called off. The exclusivity agreement with HDFC Life, valid till July 31, 2017, will not be renewed,” Max India said.
“The prospective partners had evaluated several alternative structures… However, the inordinate time associated with approval of these structures led to this decision,” it said. Max India said the firm will continue to aggressively invest in organic and inorganic growth levers. “This will be done through investments in enhancing own channels such as agency and digital, delivering superior policyholder experience, deepening and leveraging existing bancassurance partnerships, and forging new distribution alliances. In addition, it will pursue acquisition opportunities as the industry further consolidates,” it said.
HDFC Standard Life Insurance recently decided to come out with an IPO, but put on hold its proposed merger with Max Life in absence of regulatory approval. Max India was originally supposed to amalgamate Max Life Insurance with Max Financial Services. Subsequently, the insurance business of the merged entity was to be demerged so that it could be transferred to HDFC Standard Life Insurance Company. However, the whole scheme did not go down well with the IRDAI as it was in contravention of the Section 35 of the Insurance Act, 1938, that does not allow merger of an insurance business with a non-insurance firm.
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