The IRDAI has also approved ICICI Bank Ltd to bring down its stakes in ICICI Lombard to 30 per cent from 51.87 per cent (as per the June filing of the insurer).
In a regulatory filing late on Friday, ICICI Lombard said it has received a letter from IRDAI granting final approval to the proposed Scheme.
"The appointed date for the scheme is April 1, 2020. The demerger and transfer of general insurance business, as envisaged in the scheme, shall be effective within three days from the date of the final approval," ICICI Lombard said.
The final approval comes just over one year after ICICI Lombard announced its decision to acquire the general insurance business of Bharti Axa General in share swap deal.
In August, ICICI Lombard had said that the shareholders of Bharti AXA General will receive two shares of ICICI Lombard for every 115 shares of Bharti AXA General held by them as on the date on which the scheme of arrangement is approved by the board of directors of the two companies.
Under the terms of the agreement, AXA and Bharti will receive a total of about 35.8 million shares of ICICI Lombard on closing, which would represent 521 million euros, at current market value of the closing price of ICICI Lombard shares on August 21, AXA, the French insurance group, had said in a statement then.
Integration challenges such as retention of employees and customers would be a key point to monitor. In addition, as the expense ratios of Bharti Axa General is higher, this would have a short-term impact on the combined ratio of the merged entity, credit ratings agency ICRA had said in May.
Post the deal, the promoter holding in ICICI Lombard will be 48.11 per cent and public holding will be 51.89 per cent. Both Bharti and AXA will be public shareholders, ICICI Lombard had earlier said.
In a communication to colleagues last year, Bharti AXA General's MD and CEO Sanjeev Srinivasan had said that once the regulatory approvals are obtained, an interim committee with representation from both the companies will be set up for the successful completion and transition of the business.
Till such time regulatory approvals are obtained, both the companies - ICICI Lombard and Bharti AXA General - will function independently.