No impact on policyholders

The restructuring of ownership of AMP Sanmar Life Company will have no impact on policyholders either which way.

The Insurance Regulatory and Development Authority (Irda) has ensured the interests of policyholders in the Irda Act.

In the event of an insurance company faring badly or going under thereby making it impossible for it to meet commitments to policyholders, the Act stipulates that one of the insurance companies would have to take over the existing policies, or that the burden be shared among the various players.

The shareholders of AMP Sanmar Life Company are today evaluating various options and once finalised, they together with the probable acquirer would have to seek Irda approval.

According to the Irda Act, a proper scheme prepared by the buyer and the seller of the company has to be approved by the insurance regulator as per the provisions laid down in the amalgamation and transfer of insurance business.

In the past prior to nationalisation of the insurance sector in 1952, many private insurance companies failed and the policies in existence were taken over by the Life Insurance Corporation of India (LIC). The idea was to ensure that policyholders do not suffer.

Shareholders of AMP Sanmar Life Company who seemingly have put the company on the block, are actively looking at the best option which would take care of the interest of policyholders.

Some insurance company officials said that considering the strength of AMP Sanmar Life in the south, it could be likely that an insurance company wanting to expand operations there could look at acquisition of the business.

"Restructuring of ownership will have no impact on the policyholders. The business will continue and the policies will continue to be valid and will be honoured," said Graham Meyer, managing director AMP Sanmar.

ICICI Prudential Life CEO Shikha Sharma said,. "I see it more likely that foreign entrants would buy AMP Sanmar as it would be more valuable to them than to existing players."