Amid controversy over the alleged violation of foreign direct investment rules at Future Generali Life Insurance, Deepak Sood has stepped down as the company’s managing director and chief executive. Gorakh Nath Agarwal, chief actuary and chief risk officer, would now be appointed chief executive.
Next week, Sood would join Avantha ERGO Life Insurance Company as chief executive designate. Avantha, a joint venture between Germany-based Munich Re’s insurance unit ERGO Insurance Group and the Avantha Group, is the most recent entrant to the Indian life insurance industry. The company would commence operations in 2014, subject to regulatory approval. Initially, ERGO’s share in the venture would be 26 per cent.
Speaking to Business Standard, Sood confirmed he had quit Future Generali Life Insurance.
Former Securities and Exchange Board of India chairman G N Bajpai is the chairman of both Future Generali India Insurance and Future Generali Life Insurance.
According to rules, a foreign entity is allowed to hold only up to 26 per cent stake in an insurance company.
Recently, in a letter to Finance Minister P Chidambaram, Tapan Sen, a Rajya Sabha member from West Bengal, had said the actual investment of the Holland-based partner Participatie Maatschappij in Future Generali was 50 per cent. A copy of this letter was reviewed by Business Standard.
Sen said for both the life and the general insurance ventures, Participatie Maatschappij had shown its stake was below 26 per cent, but this wasn’t so. He added this was the case for the past five years.
