IRDAI approval must for sale, pledge of over 5% equity in insurance company

IRDAI said any transfer of shares beyond the stipulated threshold limits without the prior approval of the authority will attract appropriate regulatory and legal action

IRDAI on Thursday said sale, purchase, and pledge of equity in excess of 5 per cent of an insurance company's paid-up capital will need the regulator's prior approval, and any violation of the guidelines will attract action.

Issuing a clarification on the 'transfer of share of the insurance companies', the Insurance Regulatory and Development Authority of India (IRDAI) said the provisions related to sale and purchase of equity will also apply on the creation of pledge or any other kind of encumbrance over shares of an insurance company by its promoters.

It further said 'fit and proper' norms should be