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| Willis to appeal against Irda order; to terminate tie-up in JV |
| Press Trust of India / New Delhi Sep 08, 2010, 19:20 IST |
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Global insurance broker Willis Group Holdings today said it will appeal against Irda's recent decision to reject its application for renewal of licence of its joint venture firm in India.
The brokerage, however, added that it is also in the process of terminating the agreement with its Indian partner, Baichand Amoluk Consultancy Services (BACSPL), and is in discussions with another firm to form a JV.
"Willis has been in India for nearly two decades and in that time has established a reputation...We are, therefore, appealing Irda's decision that it is disinclined to renew the licence of Willis India, and are working with them to ensure the well-being of our clients and staff in the process," Willis India Managing Director Andrew Hicks said in a release.
He added that it would terminate its relationship with BACSPL which holds a 74 per cent stake in the JV, Willis India Insurance Brokers (WIIB) in the light of the complaints against the Indian brokerage by the Export Credit Guarantee Corporation of India.
In 2008, Irda had received a complaint from the Export Credit Guarantee Corporation of India alleging that the majority shareholder of the broker, BACSPL, had wrongfully withheld sums amounting to Rs 5.08 crore.
"Willis is extremely concerned about the Irda findings against its joint venture partner, BACSPL...Willis announced today that it is in the process of terminating its current relationship with Bhaichand Amoluk as a result of a series of management differences," the company said.
It further added that Willis is in advanced discussions with another party and and is looking for an early conclusion of negotiations but did not give details including the identify prospective new partner.
"Willis is in advanced contractual discussions with a JV partner and looks forward to a speedy and successful conclusion of these negotiations...The broker will work closely with Irda to obtain all necessary approvals and to facilitate an orderly transition of its business, clients and employees to this new entity," it added.
Irda had earlier this month rejected an application by WIIB for renewal of its licence citing failure on its part to follow regulations.
WIIBrokers provides insurance broking and risk management services in India.
"... The application of the broker (WIIB), seeking grant of renewal of licence that was earlier granted to them to carry out the functions as a Composite Insurance Broker, be rejected," Irda had said in its order.
According to the insurance regulator, the broker had failed to adhere to the applicable and relevant regulations while carrying out activities as an insurance broker and has acted in a manner prejudicial to the interests of policyholders.
Willis India was given a licence in 2003 for three years, which was later extended till April 2, 2010.
There existed a huge difference between the balances disclosed for 2007-08 and 2008-09 and the respective balances as reflected in the respective financial statements maintained by the broker, Irda had said.
"Willis is taking decisive action to find the best solution to seamless transition of its Indian business and staff to a new joint venture with an established and highly respected organisation in India," the statement from Willis Group Holding added.
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