Initial Public Offer Guidelines For Insurance

Insurance providers will soon be permitted to raise resources from the equity markets and be listed as market regulator Sebi is anticipated to give the nod into it soon, insurance watchdog IRDA said.

“IPO guidelines for insurance providers will be out soon. It has been approved by the joint committee of Sebi and has to be approved by the Sebi (board),” Insurance Regulatory and Development Authority (IRDA) Chairman J Hari Narayan told reporters here.

Last month, the insurance coverage regulator had said the proposed initial public offer (IPO) guidelines for non-life insurance firms were being finalised.

The guidelines for IPOs of life insurance coverage companies have been approved by SCADA, a body constituted by SEBI, and are awaiting the final nod in the market regulator.

Currently, most of the 22 private life insurers and 17 non-life players have foreign partners. The insurance coverage Act caps foreign direct investment at 26 percent.

As per the insurance coverage Act, promoters using a 26 percent stake can offload equity after ten years of operation. However, the legislation empowers the federal government to reduce the mandatory waiting period before tapping the administrative centre market.

IRDA has notified the norms for disclosure of information about insurers’ operations and balance sheets on a quarterly and yearly basis. The IPO guidelines will deal with the norms that a company must fulfill before striking the capital market.

The overall insurance sector has 21 players, which include four state-owned companies.

Several private sector insurers, including Reliance Life and HDFC Standard Life, have shown an interest in tapping the administrative centre market to augment their resource base.

The private players are waiting to tap the main markets to augment their resource base.

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