Irda likely to allow LIC to retain over 10% stake in companies

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.

Bombay Stock Exchange’s 30-share Sensex fell over 50 per cent in 2008, as the global financial crisis deepened.

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.