Chennai, Dec 23 (IANS) The Indian insurance regulator has the power to direct any general/health/reinsurer to get listed in a stock exchange if the situation warrants, as per the IRDAI (Issuance of Capital by Indian Insurance Companies transacting other than Life Insurance Business) Regulations, 2015.
The regulations gazetted on December 15, 2015 were uploaded on Insurance Regulatory and Development Authority of India’s (IRDAI) website on Wednesday.
According to the regulations, the IRDAI may direct an Indian insurance company transacting general/health/reinsurance business to get listed on the stock exchange(s) if the circumstances so warrant.
“Such company shall, notwithstanding the lock-in period, within a period of one year from the date of such directions, comply with the directions issued by the Authority,” the regulations stipulate.
According to the regulations, no Indian general/health/reinsurer shall approach the Securities and Exchange Board of India (SEBI) for public issue of shares and for any subsequent issue, without the specific previous approval of IRDAI in writing.
The regulations allow the insurers governed by it to go public even after getting the Certificate of Incorporation but the promoters/investors have to abide by the lock-in period stipulated by IRDAI.
The IRDAI while giving its approval can stipulate the extent to which the promoters/investors shall dilute; the maximum subscription which may be allotted to any class of foreign investor; minimum lock-in period for promoters/investors and other conditions that it may levy.
While giving its nod to an insurer to go public, the IRDAI will take into consideration the period for which the company has been in business; its compliance with the regulatory requirements; the maintenance of the prescribed regulatory solvency margin as at the end of the preceding six quarters commencing from the quarter immediately prior to the date of filing the application; compliance with the Corporate Governance Guidelines; compliance with the requirements of “Indian owned and controlled” as defined under the Insurance Act read with the Indian Insurance Companies (Foreign Investment) Rules, 2015; and the insurer’s record of policyholder protection.
Curiously IRDAI has not stipulated any timeline for granting approvals but said it would issue the same as expeditiously as possible.