AIA Insurance Lanka PLC has summoned an extraordinary general meeting on March 27 to formalize arrangements for separating its life and general insurance businesses.
In a circular to shareholders, AIA said that the company is currently engaged in both life and general insurance and these businesses have to be segregated under Section 53 of the Regulation of Insurance Industry (Amendment) Act No.3 of 2011.
AIA has therefore proposed to transfer its general insurance business to a newly incorporated wholly owned subsidiary of the company. This business has a net book value of Rs.1.89 billion according to the audited financial statements of the financial year ending December 31, 2013.
AIA plans to separate these businesses at the end of the third quarter of the current financial year and this transfer would be done at a value equal to the net book value of the General insurance business as at the date of transfer at a value that shall not exceed Rs.2.4 billion.
The company has told its shareholders that this value of Rs.2.4 billion has been projected as the maximum net book value at or around the date the transfer may take place. This has been done to ensure transparency.
The company said that it would make an announcement to the CSE at the time of the actual transfer stating the actual net book value at which the general insurance business will be transferred.
AIA will receive shares in the subsidiary to the value of the transfer.
The company explained that subject to relevant statutory and regulatory approvals, the proposed transfer of the general insurance business of the company would amount to the transfer of the assets, liabilities and staff of the company presently distinctly identified with the general business in relation to sales and distribution related functions, underwriting, claims and policyholder complaints management and re-insurance.
In terms of the regulatory requirements, a formal proposal in this regard has already been submitted to the Insurance Board of Sri Lanka (IBSL) last December and this proposal is under review by IBSL. As such, the proposed transfer may be subject to observations and/or conditions as may be issued by the IBSL and the relevant statutory and regulatory approvals pertaining thereto being secured.
The transfer will see AIA exclusively carrying out its life insurance business but the newly incorporated wholly owned subsidiary will handle general insurance.
As the transfer constitutes a major transaction in terms of the Companies Act, it is required to obtain shareholder approval by way of a special resolution. This resolution would be proposed for consideration at the March 27 EGM which will follow the company’s AGM.
www.island.lk
In a circular to shareholders, AIA said that the company is currently engaged in both life and general insurance and these businesses have to be segregated under Section 53 of the Regulation of Insurance Industry (Amendment) Act No.3 of 2011.
AIA has therefore proposed to transfer its general insurance business to a newly incorporated wholly owned subsidiary of the company. This business has a net book value of Rs.1.89 billion according to the audited financial statements of the financial year ending December 31, 2013.
AIA plans to separate these businesses at the end of the third quarter of the current financial year and this transfer would be done at a value equal to the net book value of the General insurance business as at the date of transfer at a value that shall not exceed Rs.2.4 billion.
The company has told its shareholders that this value of Rs.2.4 billion has been projected as the maximum net book value at or around the date the transfer may take place. This has been done to ensure transparency.
The company said that it would make an announcement to the CSE at the time of the actual transfer stating the actual net book value at which the general insurance business will be transferred.
AIA will receive shares in the subsidiary to the value of the transfer.
The company explained that subject to relevant statutory and regulatory approvals, the proposed transfer of the general insurance business of the company would amount to the transfer of the assets, liabilities and staff of the company presently distinctly identified with the general business in relation to sales and distribution related functions, underwriting, claims and policyholder complaints management and re-insurance.
In terms of the regulatory requirements, a formal proposal in this regard has already been submitted to the Insurance Board of Sri Lanka (IBSL) last December and this proposal is under review by IBSL. As such, the proposed transfer may be subject to observations and/or conditions as may be issued by the IBSL and the relevant statutory and regulatory approvals pertaining thereto being secured.
The transfer will see AIA exclusively carrying out its life insurance business but the newly incorporated wholly owned subsidiary will handle general insurance.
As the transfer constitutes a major transaction in terms of the Companies Act, it is required to obtain shareholder approval by way of a special resolution. This resolution would be proposed for consideration at the March 27 EGM which will follow the company’s AGM.
www.island.lk
No comments:
Post a Comment