A fixed deposit matures in five years; an equity share can be sold tomorrow. A whole life policy taken out by a father naming his newborn son may not discharge its obligation for 70 years. An immediate annuity bought at 30 pays as long as the annuitant lives — beyond a 100, if he lives that long. These are not rare cases. They are the product. And they change what regulation must do.

Most people assume insurance regulation exists to protect policyholders from bad companies — fraud, mismanagement, insolvency. That is incomplete. It exists to protect the contract from the mortality of companies. Companies fail, merge, restructure and exit markets. The contract can do none of these things; it must survive whatever happens to the institution that wrote it. That is the organising principle behind every provision governing mergers, amalgamations, portfolio transfers, run-offs and winding-up in life insurance law, in India and abroad.

The Insurance Act, 1938 addresses this in a cluster of provisions often cited but rarely explained. Under Section 35, no life insurance business may be transferred or amalgamated with that of another insurer except under a scheme approved by IRDAI. Section 36 goes further: before approving one, IRDAI must send notice to every life policyholder concerned and hear any who applies to be heard. The policyholder is not a passive party to a corporate transaction but a stakeholder whose voice must be heard. Section 37A empowers IRDAI to prepare a scheme of amalgamation itself, without waiting for the companies to propose one, if it is satisfied that the public interest, policyholders’ interests, or an insurer’s sound management requires it; the insurer taking over must consent in writing. This is an active intervention power, not a passive supervisory one.