New Delhi: Insurance sector regulator Irda on Friday said guidelines to allow life insurance companies to raise funds from the capital market will 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 public. I expect the comments should be in another week’s time,” Insurance Regulatory and Development Authority of India (Irda) Chairman J Harinarayan told reporters here.
The final guideline will certainly be out before the end of June, he said.
Sebi had in October last year given the go-ahead to insurance companies for coming out with IPOs.
Under the current regulation, insurance companies can get listed on the bourses after they finish 10 years of operations.
Irda is likely to allow public float by only those companies, which are in the business for at least 10 years and have a track record of three successive years of profit.
Several private sector insurers, including Reliance Life and HDFC Standard Life, have shown interest in tapping the capital market to augment their resource base.
Several of the insurance joint ventures, including Reliance Life, are about to complete 10 years of operations in India, whereas HDFC Standard Life has already completed a decade of business here.
At the moment, besides state-owned Life Insurance Corporation, 22 private companies are offering life insurance policies.
On motor insurance, Harinarayan said, there is a great merit in deregulating third party motor. That 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.
A deregulated regime for third party or any insurance is advisable regime. However in India, third-party motor pool has a long history and there are concerns at the present moment, he said.
“We will continue to regulate it. We will take steps in that (deregulating it) direction gradually. At the present moment there is no need to deregulate it,” he added.