STANDARD Life appears to have hit a complication in India after regulators raised question about the company’s latest expansion move in a country it regards as key growth market.
Edinburgh-based Standard Life said the Insurance Regulatory and Development Authority of India had expressed reservations about the plan to merge the company’s life insurance venture in the country with a local firm, which was announced in August.
The planned deal would involve the HDFC Standard Life business merging with Max Life in a move that reflected the pensions giant’s confidence in the prospects for the Indian market.
Standard Life’s chief executive Keith Skeoch said the merger would cement HDFC Standard Life’s position as the leading private sector player in the life insurance business in India. The emergence of a new class of affluent consumers is fuelling increased demand for policies in the country.
Standard Life will have a 24.1 per cent strategic stake in the enlarged life insurance business. India’s Housing Development Finance Corporation will have 42.5 per cent.
Standard Life noted HDFC had announced the regulator had expressed reservations regarding accepting the merger scheme in its current form, without giving details.
It added: “Standard Life further notes that HDFC Life believes that the scheme of arrangement … is in compliance with all applicable laws.” HDFC and Max Life propose to make “suitable representations” to the regulator.