(1) An insurer may acquire another insurer carrying on the same type of insurance business.
(2) According to sub-section (1), if one insurer wants to acquire another insurer, both insurers must pass a special resolution regarding the same in their respective general meetings and submit a joint application for in-principle consent to the authority. (3) If, after examining the application received under sub-section (2), it is deemed appropriate to grant in-principle consent, the authority may grant in-principle consent based on the following:-
(a) If the target insurer is unable to meet the short-term or long-term liability and it is deemed appropriate to acquire another insurer,
(b) In case the target insurer is unable to maintain the paid-up capital as per section 36 or to maintain the funds required to be maintained in accordance with this Act, and it is appropriate for another insurer to receive it,
(c) If the target insurer fails to issue shares to the general public within the prescribed period.
(4) In sub-section (3). Regardless of what is written, if an insurer acquires another insurer, the authority will not approve the acquisition of such insurer if there is a possibility that the insured will be harmed or harmed, unhealthy competition will increase in the insurance business or a monopoly of an insurer will be maintained or a controlled practice will be maintained.
(5) If the in-principle consent is obtained from the authority as per sub-section (3), the acquiring insurer shall appoint an assessor to study and submit a report on the following matters from among the persons qualified to be auditors of the insurer:-
(a) Overall financial position including assessment of the assets, liabilities and business of the acquiring and target insurers, (b) General projection of the effect that the acquiring insurer may have on the insurance system when the acquiring insurer acquires the target insurer and business plan of the acquiring insurer,
(c) Management of Employees of the Target Insurer after Acquisition,
(d) Management of short-term and long-term liabilities of the target insurer after acquisition,
(e) such other details as may be prescribed.
(6) Rule as per sub-section (5).The said appraiser shall submit a copy of the study report prepared by him to the authority and the acquiring insurer.
(7) If it is found appropriate to acquire the target insurer from the report under sub-section (6), the authority will grant approval for the acquisition of such insurer.
(8) After receiving the approval according to sub-section (7), both the insurers shall make a mutual agreement regarding the asset and liability management of the target insurer, and the acquiring insurer shall purchase the number of founder shares or other shares as specified by the target insurer.
(9) Other provisions related to the acquisition of insurance shall be as prescribed.