“It is clearly agreed and understood between New York Life and us that Max India will sell, subject to FDI guidelines, a 23 per cent stake in Max New York Life to NYL,” said Max India Chairman Analjit Singh.

In anticipation of change in the FDI guidelines, which could see the foreign inflow cap in the insurance sector be raised, some preliminary discussions have started and there is strong interest from NYL, he said.

Currently, NYL holds 26 per cent in Max New York Life. As per the present regulatory guideline a foreign partner cannot have more than 26 per cent in an insurance venture.

Last year, Max India restructured its joint venture arrangements with its foreign partner giving right to NYL to increase its shareholding in life insurance venture by up to 24 per cent of the issued and paid-up capital.

The said option is available to NYL for a period of eight years from the date of the amended agreement and priced on a fair market-value-based formula with a discount of 10 per cent, against an earlier preferential formula. The amended agreement is in force since July 15, 2008.