The Insurance Regulatory and Development Authority (Irda) has laid rigid conditions while clearing ICICI Bank''s proposal to set up a holding company for its insurance and mutual fund businesses. The insurance regulator has asked the bank and its proposed holding company, ICICI Financial Services, to enter into tri-partite pact with ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company. The tripartite agreements require the bank to state that it would continue to be deemed to be the Indian promoter of the two insurance companies for all purposes and to give an undertaking that irrespective of any other regulatory situations, in case of the proposed holding company being unable to meet the funding requirements of the insurance firms, the bank would step in to provide financial support to them, according to finance ministry sources.
The Irda has also stipulated that commitments to be given by ICICI Bank should be passed as resolutions by the board of all the companies signing the agreements. ICICI Bank plans to transfer its 74 per cent stakes each in the insurance companies and 51 per cent in ICICI Prudential Asset Management to ICICI Financial Services, after it gets the Reserve Bank of India''s (RBI) approval. The bank has also obtained the Foreign Investment Promotion Board''s (FIPB) approval for selling 24 per cent stake in the proposed holding firm to foreign investors, subject to the Reserve Bank of India (RBI) agreeing to the holding company structure.
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