The Hindu : Business : IRDA to issue norms for co valuation

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Thursday, Jun 11, 2009
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IRDA to issue norms for co valuation

Special Correspondent

KOLKATA: Insurance Regulatory Development Authority Chairman J. Hari Narayan said that shallow and narrow-level of disclosures were one of the weaknesses of the Indian insurance industry and the regulatory body would issue within two months, norms for valuation of the embedded value of a firm. Embedded value is the economic value of a firm and takes into account the present value of the future profits of an insurance company.

Addressing a conference on insurance, organised by the Indian Chamber of Commerce, Mr. Narayan said that a standardised norm of this parameter would be required by insurance companies which were keen on listing too.

He said this guideline would have to be followed by the companies within the current fiscal year. Guidelines on mergers and acquisitions were also being formulated.

Roadmap for IPOs

He said IRDA was in touch with Securities and Exchange Board of India (SEBI) and would finalise its roadmap on IPOs (initial public offerings) only after the proposed amendment of the Insurance Act.

Mr. Narayan was in favour of insurance companies developing more of traditional products as against their present thrust on ULIPs saying that there should be an ideal-mix. He said that as a regulator, outsourcing of core activities would not be allowed.

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