INDIA Law and Practice Contributed by: Neeraj Tuli, Celia Jenkins and Rajat Taimni, Tuli & Co
mation is proposed to be effected and contains such further provisions as may be necessary to give effect to the scheme. Two months prior to making an appli- cation to the IRDAI for the approval of this scheme, a notice of intention to make such application must be sent to the IRDAI along with a statement of the nature of the transaction and the reasons thereof, as well as four certified copies of the following documents: • a draft of the agreement or deed under which it is proposed to effect the amalgamation or transfer; • balance sheets in respect of the insurance busi- ness of each of the insurers concerned in such amalgamation or transfer; • a report on the proposed amalgamation or trans- fer, prepared by an independent actuary who has never been professionally connected to any of the parties concerned in the amalgamation or transfer in the preceding five years; • actuarial reports and abstracts in respect of the insurance business of each of the insurers; and • any other reports on which the scheme of amalga- mation or transfer was founded. The statutory and regulatory framework lays down the manner in which approval from the IRDAI may be sought, the documents required and the pre- and post-approval actions that must be complied with by the parties. Amalgamations In addition to the foregoing, pursuant to the powers conferred under Section 37A of the Insurance Act, the IRDAI also has the power to prepare a scheme for the amalgamation of an insurer with another insurer if the IRDAI is satisfied that such an amalgamation is necessary either: • in the public interest; • in the interest of policyholders; • in order to secure the proper management of an insurer; or • in the interest of the insurance business of the country as a whole. Transferring the amalgamation of the business of an insurer without the approval of the IRDAI is also grounds for suspension of the insurer’s certificate as
issued by the IRDAI. The IRDAI clarified in the Reg- istration Regulations that provisions concerning the transfer of shares will apply mutatis mutandis to the creation of a pledge or any other encumbrance over the shares of an insurer. 5. Distribution 5.1 Distribution of Insurance and Reinsurance Products The IRDAI has issued regulations setting out the licensing or registration requirements and procedures for all recognised intermediaries, including insurance agents, corporate agents, brokers, surveyors, third- party administrators, web aggregators, insurance repositories and insurance marketing firms. The IRDAI (Insurance Intermediaries) (Amendment) Regulations 2022 amends the maximum number of arrangements that a corporate agent is permitted to enter into with life, general and health insurers under the IRDAI (Reg- istration of Corporate Agents) Regulations 2015, in addition to amending the maximum limit of tie-ups permitted to insurance marketing firms with life, gen- eral and health insurers and increasing their area of operation under the IRDAI (Registration of Insurance Marketing Firms) Regulations 2015. Individual Insurance Agents An application for a licence to operate as an individ- ual insurance agent is required to comply with the conditions provided under the Insurance Act and the regulations issued by the IRDAI in this regard. Indi- vidual agents must have completed practical training and possess the requisite knowledge to solicit insur- ance business before applying for a licence. Individual agents are expected to engage only in insurance dis- tribution services and are permitted to solicit busi- ness only for one insurance company in each class of insurance business. Corporate Agents Entities eligible to operate as corporate agents include firms, banks, non-banking financial companies, co- operative societies, NGOs and companies. Corporate agents are permitted to engage in any business as their main business, apart from insurance distribution. However, if a corporate agent has a main business
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