2 months ago
104
Insurance regulator IRDAI has issued an exposure draft on new registration, capital structure, transfer of shares and amalgamation norms for Indian insurance companies.
Coming in the backdrop of a review of a clutch of existing regulations, the new norms will be consolidation of seven regulations and likely to become effective from April 1.
One of the major changes proposed include removal of requirement of prior-approval of IRDAI for listing of the insurers shares on stock exchanges, subject to compliance of specified conditions, the regulator said.
An insurer can approach any financial sector regulator for listing of its equity shares by way of divestment by existing shareholders or fresh issue of shares or both “on the stock exchange regulated by the said regulators subject to complying with certain conditions, including filing an intimation with IRDAI at least 15 days before approaching any financial sector regulator for listing of the shares.
“The insurer shall also keep the Authority informed regarding subsequent developments in the said matter. Any documents filed by the insurer under this chapter or any communications between insurer and the Authority with regard to proposed listing of equity shares shall not in any manner be deemed to be or serve as a validation by the Authority of the facts, representations, assertions or anything written in the offer documents. This fact shall be disclosed in bold letters in the offer document,” the exposure draft said.
Other major changes mooted by IRDAI include an enabling provision for relaxation of lock-in period in case the insurer or the shareholder is in financial distress or to facilitate amalgamation of insurers or shareholders; provide more clarity on capital structure of the applicants seeking new registration; as well as more clarity on applicability of requirement of prior-approval for transfer of shares.
Seeking comments by February 23, the regulator said the Exposure Draft of IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Indian Insurance Companies) Regulations, 2024, come in the backdrop of a comprehensive review of regulations being undertaken to enhance ease of doing business and reduce compliance burden for stakeholders while also ensuring interests of policyholders continues to be protected. It had advised insurance councils to submit recommendations. The Regulations Review Committee (RRC), constituted by the councils, had recommended the draft after consolidating as many as seven regulations.
The draft norms also moot setting up of various committees by insurance companies, including Risk Management Committee for development of a strong risk management system and mitigation strategies; policyholder protection, grievance redressal and claims monitoring committee headed by an independent director; and investment committee to recommend investment policy and lay down the operational framework for the investment operations of the insurer.
