Email
Print
ShareHyderabad: The Insurance Regulatory and Development Authority (Irda) is hopeful of unveiling guidelines allowing the insurance companies to tap the capital markets.
The insurance regulator is currently engaged in a dialogue with the Securities and Exchange Board of India (Sebi) for ironing out certain issues concerning disclosure norms.
According to the Irda, disclosure requirements for insurance companies arecompletely different from a manufacturing company. "We are finalising the norms for allowing initial public offers (IPOs) of insurance companies jointly with the Sebi. The guidelines are likely to be in place shortly," Irda chairman J Hari Narayan said, without willing to give a timeframe.
Ruling out the need for a co-ordination panel to sort out the issues between the both the regulators, he said that there is no question of involving any parallel regulator or a committee, since it is the Sebi which has a final say on the markets.
On issues that are pending before the regulators, Hari Narayan said, "The insurance industry has its own peculiarities. The kind of information and disclosures that have to be made by the insurance companies are slightly different from what is required by a regular manufacturing company in the prospectus. The difference between an insurance company and other companies is that in an insurance company you have a policyholder account and a shareholder account. Both these accounts have to be disclosed to the regulator," he explained.
On the issue of insurers who want to tap the market early, he said, "No company has formally approached us seeking permission. However, every company is free to submit proposals. The regulator permitting them is a different issue altogether."
Though the market has been talking about Reliance Life submitting its application with a proposal to tap the market Hari Narayan refused to comment on the issue.
Meanwhile, the insurance regulator has also clarified that there was never any directive to the Life Insurance Corporation of India (LIC) on reducing its investment exposure to below 10%.
"We have not taken any view on reducing it (LIC's stake in some companies to less than 10% level). We have only pointed out that there is risk in increasing the exposure. Consequently, we have advised LIC to restrict the investment to 10%. Wherever their exposure is in excess of 10%, we have not said that they should bring it down to 10% though it is prudent to do so," he said.
The Irda has also been expressing its displeasure over the recommendations of the Swarup Committee on entry fees and agents' commission. "The committee's recommendations on commissions are not well-founded. We will examine the details in the context of the full report. We have expressed our concerns in terms of inaccuracies in the recommendations," Hari Narayan said.
