New Delhi: U.S. based New York Life announced its exit from Indian life insurance business venture, Max New York Life, by selling its 26 percent stake at 2,731 crore to Mitsui Sumitomo Insurance of Japan, a deal dubbed as the second largest in insurance sector. In an all cash transaction, Mitsui Sumitomo Insurance (MSI), a unit of MS&AD Group of Japan will pay 2,731 crore for the stake in Max New York Life (MNYL) subject to regulatory approvals. "The transaction values Max New York Life at 10,504 crore ($2.1 billion). The consideration offered by MS&AD reflects the strong confidence in the company and its superior performance," Max India Chairman, Analjit Singh, said. This is the second largest deal in the Indian insurance sector after Reliance Life sold its 26 percent stake to another Japanese insurer Nippon Life at about 3,062 crore last year. As per existing regulation, a foreign partner can hold only up to 26 percent stake in an insurance joint venture. Post the transaction, Max India's majority stake will remain unchanged at 70 percent but the company will be renamed as Max Life Insurance Company (Max LIC), Singh said. Under a complex agreement entered into by the firms, New York Life will sell 16.63 percent of its holding to MSI. The remaining 9.37 percent would be sold to Max India for 182 crore. Max India will then sell the 9.37 percent stake to MSI for 984 crore. Asked why the deal has been structured in a two-phased manner, Max India, Managing Director, Rahul Khosla, said, "Obviously from our perspective there are worthwhile tax advantages in doing so. We are able to sell shares in such a way that from tax submission perspective, they make more sense for what tax rates are applied."