Irdai ups scrutiny of broking deals, approvals take longer
Irdai) has increased scrutiny on the ultimate beneficiaries in the transfer of shares within the insurance broking sector. This increased diligence has led to an extension in the approval timelines, with the three-four month period stretching (on average) to beyond nine months.
The sale of Aditya Birla Insurance Brokers to Samara Capital, filed in March, is currently awaiting approval from the Irdai.
The regulator, in this particular case, is seeking specific information regarding the general partners (GPs) backing Samara Capital, said two sources. In March, Aditya Birla Capital had approved sale of 50% share capital in its insurance broking business to Edme Services, part of Samara Capital group, an affiliate of Samara Alternate Investment Fund, for ₹455 crore.
The insurance broking business is providing advisory services to companies, individuals and reinsurance solutions to insurance companies.
Emails sent to Irdai, Aditya Birla Capital and Samara remained unanswered.
Beyond GPs, the Irdai is broadening its scope to scrutinise alternative investment funds (AIFs) and venture capital/private equity funds. «The regulator wants to identify and assess the ultimate beneficiaries associated with these funds in the context of share transfers within the insurance sector,» said a lawyer of a large law firm.
«Due to the prolonged approval timelines in the insurance broking share transfers, stakeholders are extending long-stop dates in some instances.»
The regulator is keenly looking at cases involving layers or intermediary companies, especially when dealing with AIFs and private equity funds, an insurance executive said.
«The regulator is keenly looking at the ultimate beneficiaries, which is leading to rigorous
