The Insurance Regulatory and Development Authority (Irda) is likely to allow state-owned Life Insurance Corp of India to retain over 10 per cent stake in companies for now, a finance ministry official said on Thursday.

“Irda may not insist on LIC cutting its stake in companies to 10 per cent as current market conditions do not favour such a step,” the official told reporters.

LIC is in talks with the insurance regulator on the issue, the official said.

LIC holds over 10 per cent stake in a number of companies, including Larsen & Toubro and ITC.

As per Irda’s new investment norms, insurance companies are not allowed to hold more than 10 per cent stake in a company.

IRDA Member R Kannan had said in September that the regulator will give reasonable time to the insurer to prune its stake in companies to 10 per cent.

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