Reliance Life-Nippon deal may be delayed.

Thursday 24, March, 2011 Nippon Life's plan to buy a stake in Reliance Life may be delayed as the deal requires special permission from the government. Under the Insurance Act, a company has to be in operation for at least 10 years before divesting stake. Reliance Life will complete 10 years in January next year. "Only the government can overrule the law and grant permission," said a source close to the development. Last week, the Japanese insurance major entered into an agreement to buy a 26 per cent stake in Reliance Life for Rs 3,062 crore. It will be the largest foreign direct investment (FDI) in India's insurance sector. Reliance Life is a part of Reliance Capital, the financial services arm of the Anil Ambani Group. "The law says the company has to be 10 years in operation. Reliance Life has approached us and we are examining it," said J Hari Narayan, chairman, Insurance Regulatory Development Authority (Irda).

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