Page 8 - Insurance Times July 2019

IRDAI

Meeting held between FM and fin regulators including
Apollo Munich-HDFC
IRDAI on budget
ERGO merger receives in-
Finance Minister Nirmala Sitharaman has recently held a
formal approval from
meeting with financial regulators including IRDAI and has
IRDAI reviewed the state of the economy ahead of the budget.
IRDAI has informally indicated no Meanwhile, The FM has also discussed several budget-re-
objection with Apollo Munich Health lated suggestions and proposals financial sector regula-
Insurance and HDFC ERGO General tors.
Insurance's merger, as per the infor-
Financial sector regulators, including RBI Governor
mation from source.
Shaktikanta Das, SEBI Chairman Ajay Tyagi, and IRDAI chief
Promoters of Apollo Munich Health Subhash Chandra Khuntia, and top Finance Ministry officials marked their pres-
Insurance and HDFC ERGO General ence at the meeting of the Financial Stability and Development Council (FSDC)
Insurance had informally sounded headed by the Finance Minister, the government said in a statement.
out the insurance regulator for its
approval. SB Insurance Brokers' licence cancelled by IRDAI
"The deal structure is being done in IRDAI has recently cancelled the licence of SB Insurance Brokers. While announc-
two steps to ensure adherence to ing the decision, the regulator said that it was
foreign holding norms in insurance. not in the interest of policyholders or the
HDFC will buy out Apollo's stake in
insurer to allow this broking company for
Apollo Munich and then merge it
continuing its operations in the industry.
into HDFC ERGO. There should be no
IRDAI has taken the decision at the backdrop
issue since a standalone health in-
of the allegations of spurious calls being
surance and general insurance entity
made and broker representing an insurance
can exist under the same company,"
company rather than customers.
the IRDAI source said.
The initiative of reaching out to the The regulator has also stated that that it has asked the broker to respond to
regulator was taken by Housing De- the charges of the broker's tele-callers identifying themselves as members of
velopment Finance Corp before an- an insurance company rather than SB Insurance Brokers.
nouncing the deal, as it has faced
It has also been stated by IRDAI that the tenor and rhyme of the reply of the
rejection earlier, the source said.
broker implied it was attempting to question the regulatory prescription that
HDFC approved acquiring 50.8% every broker has to identify himself to the client.
stake in Apollo Munich from the
"The reply further attempts to justify the action of their personnel claiming
Apollo Hospitals Group, for 13.36
themselves to be speaking from the office of the insurer. But both the argu-
bln rupees, and 0.4% stake from a
ments of the broker are untenable and cannot stand the scrutiny of law and
few employees of the health insur-
regulations because of the fact that the customer is misled and is placed at a
ance company, for 108.4 mln rupees.
disadvantageous position," said IRDAI in its order.
8 The Insurance Times, July 2019