Insurance Regulatory Authority of India (IRDA) will formulate guidelines for mergers and acquisitions (M&A) for non-life insurance companies, IRDA chairman J Harinarayana said here on Tuesday.

Speaking to reporters after formally launching a SMS-based customer grievance redressal system of SBI Life, Harinarayan also said that the IRDA was evaluating M&A proposals from two non-life companies. He, however, did not name them.

At present, the Insurance Act provides for the M&A pertaining to life insurance companies only.

"The two proposals, once examined, might serve as a blueprint to formulate guidelines on mergers and acquisitions in non-life sector," Harinarayana said.

There are 22 life insurance companies and 21 non-life insurance companies operating in the country.

The proposed M & A norms are expected to spur consolidation leading to fewer but stronger players in the insurance sector.

Meanwhile, referring to the impact of new Unit-Linked Insurance Plans (ULIPS) which came into force from September 1, this year, the IRDA Chairman said the Authority would review the situation next year.

"September this year was not as bad as September last year. But overall impact will be known only after the end of the year. It will take time to stabilise and the position will be better by FY 11," he said.

M N Rao, Managing Director and Chief Executive Officer of SBI Life said the company was hopeful of maintaining 40 per cent growth in new business premium adding the company had opened 138 branches and recruited 1200 new staff in the last six months.