"As you know that there was a problem and the proposal has been turned down by Irdai. But we are looking at alternatives. We now have to look at a different way of doing it," HDFC Managing Director Renu Sud Karnad told PTI.
On asked about what exactly would be an alternative way to go ahead with the merger plan, Karnad said: "We are still discussing, I can only tell that the way it was envisaged it has been turned down and now we are looking at alternatives."
In November last year, IRDAI had expressed reservations on the merger as it involved amalgamation of HDFC Life with the Max group's financial entity, which ultimately holds the life insurance business of the latter.
The amalgamation scheme was supposed to be executed among Max group's Max Financial Services Ltd (MFSL), its subsidiary Max Life Insurance Company Ltd (MLIC), HDFC Standard Life Insurance Company Ltd (HDFC Life) and Max India.
As per the original plan, Max India was 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 Insurance Regulatory and Development Authority of India (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.
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