The proposed merger between Max Financial Services and its insurance arm Axis Max Life faces a setback, as a high‑powered committee led by former SBI Chairman Dinesh Khara has advised against allowing mergers between insurance companies and non‑insurance companies, sources informed CNBC-TV18.
The committee, appointed by the Insurance Regulatory and Development Authority of India (IRDAI), submitted a confidential report recommending that such mergers should not be permitted, citing potential risks to policyholders, sources said.
Max Financial had disclosed to CNBC‑TV18 in May 2024 that it was “hopeful of getting IRDAI approval” for the merger, with restructuring expected to begin in first half of FY25.In February 2025, Max Financial approved the listing of Axis Max Life through a merger once legal clarity was in place.
Background and regulatory context
The Government, as part of the proposals under the Insurance Amendment Bill, had sought views on whether mergers should be allowed between insurers and non‑insurance companies. The Khara committee flagged potential risks to policyholders.The IRDAI‑appointed panel was formed in February 2025 to help devise amendments to the Insurance Act, 1938, including raising foreign direct investment (FDI) limits and introducing composite licences.
A central element of the draft Bill was the proposal to allow such mergers.
The panel, which includes industry veterans and regulatory experts, handed over its recommendations to IRDAI in a confidential report, according to sources.
What happens next?
IRDAI will now collate feedback and finalise its stance based on the committee’s input before formally presenting its recommendations to the Government. The final Insurance Amendment Bill will hinge significantly on whether the Government aligns with the committee’s risk‑averse view on insurer–non‑insurer tie‑ups.
(Edited by : Anshul)
First Published: Jul 17, 2025 12:10 PM IS
