Insurance intermediaries with majority foreign stake can't repatriate over 75% as dividend: Irdai

Insurance intermediaries having majority foreign holding cannot repatriate dividend more than 75 per cent of the net profit and if there is any extra-ordinary profits or income, the dividend payout ratio should be calculated after excluding that, regulator IRDAI said on Friday.

Issuing guidelines on 'repatriation of dividends by insurance intermediaries having majority by foreign investors', Irdai said such entities should seek prior approval from the Authority for the payout.

On the quantum of dividend payable, it said: "The dividend payout ratio shall not exceed 75 per cent. Dividend payout ratio shall be calculated as a percentage of 'dividend payable in a year' (excluding dividend tax) to 'profit after tax during the year'.

"ln case the profit for the relevant period includes any extra-ordinary profits/ income, the payout ratio shall be computed after excluding such extra-ordinary items for reckoning compliance with prudential payout ratio".

Besides, the financial statements pertaining to the financial year for which the insurance intermediary is declaring a dividend should be free of any qualifications by the statutory auditors, which have an adverse bearing on the profit during that year.

"ln case of any qualification to that effect, the net profit should be suitably adjusted while computing the dividend payout ratio."