The Hindu : Business : IPO norms for life insurance companies by month-end

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Saturday, Jun 04, 2011
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IPO norms for life insurance companies by month-end

Special Correspondent

NEW DELHI: The Insurance Regulatory Development Authority (IRDA) on Friday said the guidelines allowing life insurance companies to raise funds from the capital market would be out by this month-end.

“The exposure draft on IPO guideline has been released. We are waiting for the comments of various stakeholders including the public. I expect the comments in another week's time,'' IRDA Chairman J. Harinarayan told reporters here.

The final guidelines would certainly be out before the end of June, he said. Under the current regulation, insurance companies can get listed on the bourses after they finish ten years of operations.

Several private sector insurers have shown interest in tapping the capital market to augment their resource base. On motor insurance, Mr. Harinarayan said there was a great merit in deregulating third party motor. “It will enable pricing based on competitive situation, wherein there would be the best pricing, and also the companies will be in better position to manage the risk.''

Mr. Harinarayan said the regulator is also considering a proposal to allow banks to sell products of two insurance companies each in life and non-life categories, a move that will help increase penetration. At present, a bank is allowed to sell products of one each in a life insurance company, a general and a health insurance firm.

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