CHENNAI: Whether the insurance mergers and acquisitions (M&A) benefits the acquiring company or not, it certainly boosts up the revenue of Insurance Regulatory and Development Authority of India (IRDAI), said a senior official.
For the year ended 31.3.2020, IRDAI had earned a sum of about Rs 7.19 crore as amalgamation fee, the official not wanting to be quoted told IANS. For the current year, the one mega deal that IRDAI has to give its nod is the amalgamation of Exide Life Insurance with HDFC Life Insurance.
To a question raised by IANS, HDFC Life Insurance MD and CEO Vibha Padalkar on Friday said applications have been sent to IRDAI and the Competition Commission of India (CCI) for their nod to merge Exide Life Insurance. Queried on the quantum of transaction processing/amalgamation fees paid to IRDAI she said the company has not come to that stage yet.
The general insurance sector saw stake sale/purchase last year. Paytm acquired Raheja QBE, HDFC Ergo acquired Apollo Munich, Sachin Bansal bought DHFL General Insurance, and Bharti Axa General was acquired by ICICI Lombard.
The IRDAI gets an amalgamation fee of 1/10th of one per cent of Gross Direct Premium written in India by the transacting entities during the financial year preceding the financial year in which the application is filed with it subject to a minimum of Rs 50 lakh and maximum of Rs 5 crore.
The primary revenue for IRDAI is annual licence renewal fee from the insurers. According to IRDAI, the insurers pay a licence renewal fee of 1/20th of one per cent of the gross direct premium underwritten in India subject to a minimum of Rs 500,000 and a maximum of Rs 10 crore. The IRDAI oversees the insurers including their financial health, market activities and others. (IANS)