Insurance regulator can levy conditions on share transfer

India's insurance regulator can levy conditions like a minimum lock in period while according its sanction to transfer of shares in an insurance company, according to the new regulations.

The Insurance Regulatory and Development Authority of India (IRDAI) on Tuesday uploaded on its website the new regulations governing the transfer of equity shares of insurance companies.

As per the regulations, IRDAI may impose conditions like minimum lock in period and infusion of additional capital in the proportion of the shareholdings to adhere to the solvency norms at all times on the Indian promoters as well as foreign investors.

Prior to the approval of share transfer, IRDAI would conduct a due diligence of the proposed transferee.

Prior approval of IRDAI is necessary for transfer or issue of equity shares in an insurance company where after the transfer, the holding of the transferee would exceed five percent of the paid-up equity capital.