State run banks, Canara Bank & Oriental Bank of Commerce (OBC) and insurance arm of HSBC, HSBC Insurance (Asia-Pacific) Holdings Ltd have formally signed the agreement for their life insurance venture in India.
The venture will be named as Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited, a press release said.
The new venture has applied to the Insurance Regulatory and Development Authority (Irda) for its approval. The three entities had announced the formation of the venture in March 2007.
Canara Bank will hold 51% stake in the new company, HSBC a 26% interest and OBC the remaining 23%. The new company, with Rs 325 crore (Rs 200 crore equity capital and Rs 125 crore premium) worth of capitalization, will have access to over 40 million customers and a nationwide distribution network of 3,600 branches throughout India, the release said.
The releases said that, HSBC will contribute Rs 177 crore (including Rs 125 crore premium), Canara Bank Rs 102 crore and OBC Rs 46 crore. Under the terms of the agreement, HSBC will provide a range of management services, which will include nominating executives for certain senior roles, it added. Harpal Karlcut is the chief executive officer designate of the insurance joint venture.
?The new insurance company aims to introduce a variety of insurance products/services, fulfilling the needs of the entire spectrum of people including high net-worth individuals, professionals, SMEs, farmers and also micro insurance services for the rural/semi-urban masses?, said M B N Rao, chairman and managing director, Canara Bank.
