Paving the way for listing of insurers, regulator Irdai today proposed that the minimum shareholding by promoters should at all times be maintained at 50 per cent of the paid-up equity capital.
"The minimum shareholding by promoters or the promoter group shall at all times be maintained at 50 per cent of the paid-up equity capital of the insurer," said the draft guidelines for 'Listed Indian Insurance Companies'.
However, if the present holding of the promoters is below 50 per cent, such would be the minimum holding.
In his Budget speech, Finance Minister Arun Jaitley had proposed listing of four wholly-owned PSU general insurance companies. The four companies are New India Assurance Company, National Insurance Company, Oriental Insurance Company, United India Insurance Company.
Among others, HDFC Life and ICICI Pru have announced plans to launch IPO and get listed. Currently, no Indian insurance company is listed.
Furthermore, ownership limits for all shareholders other than promoters or the promoter group, in a definitive timeframe, should be based on categorisation of the shareholders under two broad categories -- natural persons (individuals) and legal persons (entities/institutions).
A subsidiary company can invest in a listed insurance company, said the Insurance Regulatory and Development Authority of India (Irdai).
Irdai proposed that these guidelines would be applicable to all insurers that have listed their shares or are in the process of getting their shares listed on the stock exchanges in relation to transfer or proposed transfer of shares.
On provisions relating to transfer of the shares, the draft said every person who intends to make any transfer or make any arrangement for transferring 1 per cent or more but less than 5 per cent of equity share capital of the concerned insurer, "may do so, subject to the compliance of fit and proper criteria".
An acquisition which is likely to take the aggregate holding of "such person together with shares held by him, his relatives, associate enterprises and persons acting in concert with him" to 5 per cent or more of the paid-up equity share capital of the insurer will have to seek prior approval of Irdai.