Mumbai: The insurance regulator Irda on Wednesday said the initial public float guidelines for the insurance industry will be ready by early October.
“The IPO (initial public offering) guidelines will be finalized by a panel jointly set up by the Sebi and us (Irda). We expect the final guidelines to be ready by early October,” Insurance Regulatory and Development Authority (Irda) chairman J Hari Narayan told media on the sidelines of an insurance summit organized by industry chamber Assocham in Mumbai.
He further said the guidelines, which will allow both life and non-life insurers to mop up funds from capital markets, will certainly be out before insurance companies complete 10 years of operations. Under the Insurance Act, promoters having 26% stake, could offload their equity after 10 years into operations.
Currently, most of the 22 private life insurers and 17 non-life players have foreign partners and the Insurance Act caps foreign direct investment (FDI) at 26%. The Act also restricts private players from entering the capital markets before completing a decade of operations.
In July, the Irda had finalized the IPO norms and had sent to the capital markets regulator Sebi for clearance. Following this, the two regulators jointly formed a panel to finalize the IPO norms.
It can be noted that the Irda had already notified the disclosure norms, necessary for providing details about the operations and balancesheets on quarterly and yearly basis. The IPO guidelines would deal with the minimum norms that an insurer must fulfill before hitting the markets. The private players are waiting to tap the primary markets to augment their resource base as all the private players are yet to break even.