Max FinancialServices Ltd.'s and Max Life Insurance Co. Ltd.'s promoters are seeking anoncompete fee from HDFC StandardLife Insurance Co. Ltd. as a condition for the firms' , The Economic Times reported July 19,citing "three persons aware of the ongoing discussions."

The amount of the fee is still being negotiated. The proposedfee will also need to be approved by regulators and minority shareholders.

A spokesman from Max Group declined to comment on thematter, the publication reported.

Under the potential merger, Max Life Insurance will mergewith parent Max Financial Services. HDFC Standard Life will then merge with MaxLife Insurance. The merger would eliminate the need for HDFC Standard Life tofile for an IPO giventhan Max Financial Services is already a listed firm.

Following the completion of the potential merger, the HDFCGroup will likely own a 65% stake in the merged entity, while Max Group willown the remaining 35%.