Max India to Sell Its 51% Stake in Max Bupa, but Policyholders Need Not Worry
As said by Max India, the sale of its 51% stake in Max Bupa Health Insurance Company has been approved by the IRDAI (Insurance Regulatory and Development Authority of India). It will be sold to a private equity firm True North.
With IRDAI’s this approval, Max India will take a back seat from the health insurance business. Announced in February 2019, this all-cash transaction valued Max Bupa an enterprise value of Rs. 1,001 Crore.
Bupa is Max Bupa’s current joint venture partner in Max Bupa and is committed to the JV. Bupa says that it will continue playing an active role like previously through its Board positions and knowledge exchange initiatives.
After this approval, the probability is that the transaction will be concluded within the next few weeks. All current customer policies will remain unaffected and all customer support channels will remain the same too.
Previously called India Value Fund Advisors-IVFA, True North was established in the year 1999. Its main aim was to invest in and transform medium-sized profitable businesses into industry
There are six individual investment funds in all that True North has introduced. They have a joint collaboration of more than 2.8 billion that includes co-investment.
But as far as the policyholders of Max Bupa are concerned, there is not a thing to worry about. This can be assured as IRDAI takes care of existing policyholders’ interests whenever there is a change in ownership. IRDAI does not allow any arbitrary modification in the policy terms. In case there is any change, it will first go through the insurance regulator and on approval, the insurer will inform the customers about the same. According to the norms, the customers will be notified 120 days prior to its implementation.
Likewise, in case a company has decided that it is going to discontinue a particular product, then as per the regulation, the insurer will be required to provide the customer with some other similar or better plan in terms of inclusions and exclusions and other terms and conditions.
It is a usual case that insurers increase the premium amount on the basis of several factors like medical cost inflation, the loss they suffer from etc. But this act of insurance companies requires regulatory approval. Not taking into account the change of ownership, insurers still need to follow this process.
If there is any accumulated bonus because no claims were made in the previous years, then it is mandatory for the insurers to credit such benefits. The insurer has to take IRDAI’s approval even in case of a change in the insurer’s name.
Switching ownership is not likely to create any major change for the
