The Insurance Regulatory and Development Authority of India vide notification dated 05-11-2020 has issued the Exposure draft of IRDAI (Manner of Determination of Compensation to Shareholders on Merger of an Insurer under a Scheme Prepared under Section 37A) Regulations, 2020. The shareholders and members whose rights have been adversely impacted by the scheme of amalgamation /merger framed under Section 37A shall be entitled to compensation. For the purpose of determination of such compensation, draft regulations is issued.
As per the draft regulations, every shareholder of the acquired insurer shall be given such amount as compensation, as bears to the residual value of the assets, the same proportion as the amount of paid-up capital of the shares held by the shareholder bears to the total-up capital of the acquired insurer. The comments / suggestions on the draft Regulations may be forwarded to sumit.arora@irdai.gov.in with a copy to uma@irdai.gov.in by 20th November, 2020 in the prescribed format.
