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LIC may get additional time to hold stake in IDBI Federal Life

According to insurance laws, one company cannot be a promoter of two insurance firms in the same category.

May 06, 2019 / 20:46 IST
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Life Insurance Corporation of India (LIC) is likely to get a temporary exemption to hold stake indirectly in IDBI Federal Life Insurance. According to sources, Insurance Regulatory and Development Authority of India (IRDAI) will allow LIC to hold stake in two insurance companies as it holds stake in IDBI Bank.

According to insurance laws, one company cannot be a promoter of two insurance firms in the same category. Here, LIC itself is a life insurer while it holds stake indirectly in IDBI Federal Life via IDBI Bank.

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Nonetheless, the source told Moneycontrol, "To prevent uncertainties in the business, LIC's stake in IDBI Federal Life through its holding will be allowed for the time being."

LIC is the majority shareholder in IDBI Bank. Hence, it has become the parent of its life insurance firm IDBI Federal Life. IDBI Bank is one of the parent firms of IDBI Federal Life.