Insurance regulator Insurance Regulatory and Development Authority (IRDAI) on Saturday posed reservations on the present form of amalgamation of Max India and HDFC Life into a single entity.

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The two companies, however, said they will clarify on the matter to the regulator.

The scheme of amalgamation proposes merging of insurance business in an agreement between Max Financial Services Ltd (MFSL), its subsidiary Max Life Insurance Company Ltd (MLIC), HDFC Standard Life Insurance Company Ltd (HDFC Life) and Max India.

HDFC Life and MLIC had filed an application seeking in-principle approval of Irdai for the proposed amalgamation scheme on September 21, 2016.

"Irdai has expressed reservations to accept the scheme of amalgamation in its current form. MLIC and HDFC Life believe that the scheme of arrangement as submitted to the Irdai is in compliance with all applicable laws and propose to represent and clarify the matter to Irdai," they said in separate filings to the exchanges.

Irdai officials could not be contacted for comment on the matter.

In a complex and tier-structured demerger and merger plan, Max India will amalgamate Max Life Insurance with Max Financial Services.

Subsequently, the insurance business of the merged entity is to be demerged so that it can be transferred to HDFC Standard Life Insurance Company.

As per the proposed scheme, the remaining of the merged entity i.E., minus the insurance business, will be amalgamated with Max India.

Max Financial Services, promoted by $2 billion Max Group, is the holding company for Max Life.