IPO norms for insurance companies soon: Irda

Insurance regulator Irda today said it will soon come up with IPO guidelines that would allow life and non-life insurance companies to raise funds from the capital market.

 "The (IPO) guideline will be out soon...Certainly before the insurance companies complete 10 years," Irda Chairman J Hari Narayan told reporters here.

As per the Insurance Act, promoters having 26 per cent stake, can offload equity after 10 years of operation. The legislation also empowers the government to reduce the mandatory period.

The regulator had last month said that the proposed IPO guidelines for life insurance firms were being examined by a Sebi body and is expected shortly.

"We have done some work on economic capital calculation of life insurance companies. Similar valuation for non-life firms would be done next month. Then the IPO guideline would be in place," he said.

Irda had already notified the disclosure norms, necessary for providing details about the operations and balance sheets on quarterly and yearly basis. The IPO guidelines will deal with minimum norms that a company must fulfill before hitting the capital markets.

Besides, the state-owned Life Insurance Corporation, 22 private companies are offering life insurance policies. The general insurance sector has 21 players, which include four state-owned companies.

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