Irda notifies M&A norms for general insurers

In what could be a breather for the cash strapped general insurance sector, Insurance Regulatory and Development Authority (Irda) has notified merger and acquisition (M&A) guidelines thereby allowing consolidation in the sector.

The regulation would be applicable to all private general insurance companies with immediate effect.

Along with Irda approval, an acquirer would need to have approvals from the Reserve Bank of India and the finance ministry, in case it has FDI. Clearance from the Securities and Exchange Board of India (Sebi) and the Competition Commission of India would be mandatory.

To make sure the policyholder interest is protected, the insurance regulator has mandated insurance companies to inform their respective customers about the deal.