Bankruptcy suit will not affect policyholders, says Aviva India

Tribunal initiated collection proceedings following dispute over office rentals and other dues

Bankruptcy suit will not affect policyholders, says Aviva India

Insurance News

By Gabriel Olano

Aviva Life Insurance Co. Ltd India has assured its policyholders that the bankruptcy proceedings that have been initiated against it will have no effect on their insurance coverage and servicing of claims.

According to a report by Live Mint, a National Company Law Tribunal (NCLT) order dated November 09 has initiated bankruptcy proceedings against Aviva India over non-payment of license fees, car parking, maintenance and service charges, and service tax to Mumbai-based Apeejay Trust.

Aviva, which had leased office space from Apeejay Trust in 2008, allegedly owes the company almost INR2.8 million (US$39,000) in dues.

In May, Aviva replied to a notice from Apeejay, denying any liability and stating that no dues were payable, the report said. Apeejay later contested this, saying Aviva had failed to liquidate lease rental dues payable for the premises taken on lease. Following Aviva’s inaction on the matter, NCLT accepted a petition initiating a corporate insolvency resolution process and ordered the appointment of an insolvency resolution professional to oversee the collection, the report said.

In response, Aviva issued a statement, which said: “Aviva India enjoys a robust solvency margin in excess of 300% versus the regulatory requirement of 150%. The issue at hand is a commercial dispute with a vendor and Aviva reserves its rights and remedies in the court of law.”

Meanwhile, lawyer Rajesh Narain Gupta commented that, in case Aviva decides to pay the amount, it will be classified as an operational issue linked to its balance sheet. This will not have any impact on the policyholders.

Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!