Final IPO norms for non-life insurers in 2 weeks: Irda

The insurance regulator had issued final initial public offering (IPO) guidelines for life companies last year

Insurance Regulatory and Development Authority (Irda) today said it is likely to issue final IPO guidelines for general insurance companies in the next two weeks.

"The insurance advisory committee had a look at the recommendations. So it (final IPO guidelines for non-life companies) should be out in the next 2 weeks," Irda Chairman J Hari Narayan said on the sidelines of a CII event here.

"This year, we have finalised the amalgamation of life (companies) and IPO of non-life. So these two will be made regulation soon. The insurance advisory council has already met, that is the penultimate step. Then it goes to the board and then it is presented," he said.

The insurance regulator issued final initial public offering (IPO) guidelines for life companies last year.

Asked if any life insurance company has shown interest in raising capital through IPO, he said, "Not yet. Nobody has filed."

As per the draft guidelines issued last month, general insurance companies planning to tap the capital market for funds should have 10 year experience and will have to seek prior approval from the sector regulator.

The draft norms -- Irda (Issuance of Capital by General Insurance Companies) Regulations, 2012 -- state that the regulator will take into account the insurer's financial position, its capital structure and regulatory record before permitting them to come out with the share sale.

Further, Irda has kept with it the powers to prescribe the extent to which the promoters will have to dilute their shareholdings, and the shares that can be alloted to foreign investors.

The regulator has also prescribed additional information -- risk factors specific to insurance companies, an overview of the insurance industry and a glossary of terms used in the insurance sector -- in the offer document for companies to come out with share sale offer.