The IRDAI is yet to announce range of its board decisions on Monday officially and clarify how it intends to sort out WestBridge’s plan to be a majority stakeholder in both, KIWI General Insurance and Star Health Insurance, where a few segments including Health Insurance will remain common

Hyderabad: The IRDAI board, which met on Monday, has cleared R1, initial approval in the three phase licensing exercise, for a new general insurance company, KIWI General Insurance, set up by private equity firm WestBridge Capital and Neelesh Garg, former MD and CEO of Tata General Insurance.

This is also for the first time that the IRDAI is seeking its board approval for granting a R1 approval to any new player. Normally issuing R1 license has been an administrative decision of IRDAI chairman.

In the absence of regular chairman, after Debasish Panda retired in March, PK Arora, member, Actuary, IRDAI, had chaired the meeting and Prashant Goyal, joint secretary, Ministry of Finance had attended the meeting as a government nominee.

This will be WestBridge’s second investment into the insurance sector as a majority owning promoter as it is already holding 40 per cent stake in Chennai based stand alone health insurer-Star Health Insurance.

WestBridge is also having a stake of more than 60 per cent in KIWI General insurance which will have around Rs 140 crore of initial capital.

The IRDAI is yet to announce range of its board decisions officially and clarify how it intends to sort out WestBridge’s plan to be a majority stakeholder in both the insurance companies where a few segments including Health Insurance will remain common.

Industry is watching how IRDAI is acting on the issue of conflict of interest and issue a final license to KIWI General Insurance.

This is also the first time any majority stake holder in a health insurance company will be allowed to float a general insurance company.

Earlier, Anil Ambani promoted Reliance Capital, now defunct, was allowed to set up both – a general insurance company and a health insurance company though the health insurance company was merged with the general insurance company afterwards at the insstruction of the IRDAI.

Sumir Chadha Deepak Ramineedi are the common board of directors representing WestBridge Capital in both Star Health Insurance and WestBridge Capital.

The existing IRDA regulations allows an entity to be a majority promoter, holding more than 25%, only in one life, one general, one health, and one reinsurance company.

However, an entity as an investor can invest upto 25 per cent in more than one company.