The company also doesnt have any plan to partner Punjab National Bank (PNB), the US-based Principal Financial Group and Vijaya Bank in their proposed venture into the life insurance business. In the venture, Berger was supposed to hold 39%, PNB 30% and Principal 26%.
We have sold off our stake in the insurance broking company and have no plans to venture into life insurance, Mr Bose said.
Interestingly, the firm, in its earlier avatar as Avani Insurance Services, was wholly-owned by Berger Paints till March 2005. The company was forced to divest its majority stake to PNB and Principal to meet Insurance Regulatory & Development Authority (Irda) norms as Berger could not fulfill the criteria.
This resulted in it retaining only 25% of the Rs 5 crore capital. The majority holding was divested to Principal with 36%, followed by PNB (30%) and Vijaya Bank (19%).
During that time, the name of the firm was changed from Avani Insurance Services to its present name to reflect the new shareholding. Indian Bank has just picked up a 2% stake in the broking outfit.
The broking outfit was promoted to sell life and non-life products of all insurance companies through a network of bank branches to generate additional fee-based income.