Irdai cuts share transfer approval fee by 80% to ₹10 lakh for insurers

Insurance regulator Irdai has reduced the share-transfer approval fee from ₹50 lakh to ₹10 lakh and clarified compliance requirements for insurer IPOs, ESOPs and amalgamations

The Insurance Regulatory and Development Authority of India (Irdai) on Monday issued a master circular clarifying requirements governing insurer registration, capital structure, share transfers and amalgamations. The circular reduces the processing fee for share-transfer approvals by 80 per cent and specifies compliance requirements for initial public offerings (IPOs), employee stock options and amalgamations. It is effective from the date of issuance.

 

Under the revised framework, the processing fee for share-transfer approvals under Regulation 22(4) has been slashed by 80 per cent to ₹10 lakh from ₹50 lakh. Fees paid before the notification date will remain non-refundable. Furthermore, applications for no-objection certificates (NOCs) filed before the notification of the Registration (Amendment) Regulations, 2026, will not attract processing fees under the applicable provision, while subsequent applications must be accompanied by the prescribed fees.

 

The circular outlines compliance requirements for insurers proposing to list their equity shares. Such insurers must disclose existing and proposed post-listing shareholding patterns, with separate details for shareholders holding more than 1 per cent of paid-up equity capital. The disclosures must also cover the IPO's purpose and size, including fresh share issuance and offers for sale by existing shareholders. The insurer must submit a declaration signed by its managing director or chief executive officer covering the accuracy of information disclosed in the offer documents, disclosure of regulatory action taken or initiated by Irdai, compliance with applicable laws and protection of policyholders' interests at all times.

 

Irdai has also tightened oversight of employee stock option plans (ESOPs). Equity issuances routed through dedicated employee trusts, as well as stock option exercises by key managerial personnel (KMPs) or directors — individually or jointly — that breach statutory threshold limits, will require prior regulatory clearance. Listed entities must establish mechanisms with depositories and stock exchanges to enforce these limits continuously.

 

To standardise amalgamations and structural realignments, Irdai has specified the documentation required for proposed amalgamations and transfers. Insurers must submit a report by an independent actuary assessing the impact of the proposed transaction on the transferee insurer's technical reserves, solvency position, product pricing and financial condition. The actuary must not have been professionally connected with any of the parties involved during the five years preceding the date of the report.

 

Additionally, insurers issuing instruments classified as other forms of capital (OFC) under the Registration Regulations, 2024, must file detailed post-allotment submissions within 15 days of allotment. The submission must include the type and nature of the instrument, interest or dividend rate, quantum of capital issued, subscriber details, including their identity and relevant corporate or individual particulars, and the insurer's solvency position before and after allotment. A declaration signed by the insurer's managing director or chief executive officer must confirm the accuracy of the information and compliance with applicable laws.

 

The circular clarifies that voluntary surrender of registration may be sought in three circumstances: when the insurer's business or a class of its business is transferred to another person pursuant to an Irdai order; when the business or a class of business is transferred to or amalgamated with another insurer after obtaining Irdai's approval; or when the insurer is unable to commence operations within the stipulated period after receiving its certificate of registration.