The government has allowed Anil Dhirubhai Ambani Group firm Reliance Life Insurance to sell 26% stake to Japan’s largest life insurer Nippon Life Insurance.
However it has asked IRDA to frame a common policy before approving the deal. The deal, which was announced in March, is worth $680 million.
Nippon Life (Approx)valued Reliance Life Insurance at $2.6 billion. IRDA had sought government approval for the Reliance-Nippon deal as it did not satisfy conditions prescribed under Section 6AA of the Insurance Act of 1938.
This section says that any Indian promoter holding more than 26% stake in an insurance firm can divest his stake only after 10-years of operations. Reliance Life will complete 10 years of operation in January next year. Sister firm, Reliance Capital, holds 100% stake in Reliance Life.
