Insurers say they are working on the same and will be able to comply with the IRDAI demand within the deadline.
Regulator IRDAI has asked all insurers to report their ownership structure and control within the deadline of January 18.
Insurers say they are working on the same and will be able to comply with the IRDAI demand within the deadline.
The guidelines on Indian-owned and controlled insurers, signed by IRDAI Chairman T S Vijayan, were issued by the regulator on October 19, 2015 and the three-month deadline ends on January 18.
The stipulations are applicable to all the insurers, both life as well as non-life, irrespective of the extent of foreign shareholding.
The guidelines also provide, on an application made to the authority, for an extension of the period of compliance by a further three months.
As per IRDAI guidelines, which were issued last year, foreign investors in a domestic insurance joint venture can nominate non-CEO-type key management personnel, provided such appointments are approved by the board where the majority of the directors, excluding independent members, are the nominees of domestic promoters.
Under the insurance laws, majority of directors, excluding independent directors, should be nominated by the domestic promoters/investors.
In addition, they will nominate the chairman in cases where the chairman has a casting vote, it adds.
The quorum at board meetings will be decided by the presence of the majority of domestic directors. This is regardless of the presence of the foreign partner's nominees.
While some insurers have applied to the FIPB as well as the authority, seeking approval for change in their shareholding pattern and revision in the limit of foreign investment, majority have not done so as there has been no change in their ownerships following the increased FDI as their foreign partners have not taken a call.
It may be emphasized that the guidelines provide a maximum period of six months for compliance from the date of issue, an IRDAI notification dated December 23, 2015 said.
So far, nearly a dozen foreign companies expressed their interests to increase their stake in their JVs here following hike in FDI to 49% last year.
But, only the French major Axa (with Bharti) and British company Standard (with HDFC) are the only two foreign companies which have increased their stakes in their JVs here and accordingly made the compliance reporting so far.
Axa has said it will raise stake in both life and non-life
insurance ventures with Bharti Enterprises, leading to foreign capital inflow of about Rs 1,300 crore.
Similarly, Standard will raise stake in life insurance venture with HDFC, leading to foreign capital inflow of around Rs 1,700 crore.
HDFC Standard Life has approached the FIPB for transfer of its shares currently held by HDFC to Standard Life (Mauritius Holdings), thereby increasing foreign shareholding in insurance JV from 26% to 35%, which was cleared by FIPB on December 29.
"The proposal of HDFC Standard Life would entail foreign investment of Rs 1,700 crore," an FIPB official had said earlier.
In case of ICICI Lombard, the foreign partner is likely to increase its stake in the company to 35% and the process is already on.
"We are already under the process of increasing the FDI to 35% and all the necessary compliances will be put in place within stipulated time," ICICI Lombard Chief (Claims and Underwriting), Sanjay Datta told PTI.
ICICI Bank has already said it would sell 9% stake in its general insurance arm ICICI Lombard to Fairfax Financial Holdings which will bring down the bank's stake in the insurance venture to 65% and bring in Rs 1,550 crore.
Liberty Videocon General Insurance is likely to get up to Rs 300 crore of foreign capital through hike in FDI to 49%.
"In Liberty Videocon case, there are eight members, including me, on the board and all of them have been hired from the market.
"Apart from me, three are from Indian promoters, two each are from foreign promoter and independent directors' category that are on the company's board.
"Hence, we have already complied with the norms," Liberty Videocon chief executive and director Roopam Asthana said.
"The FDI hike to 49% is already under process and we are expecting Rs 200-300 crore to come through this route and it is likely to be completed by next fiscal," he added.
Several other companies have announced their plan to do so. Still, they are yet to comply with the guidelines.
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