The IRDAI has released a draft of new regulations for Indian insurance companies, with the aim of making it easier for insurers to register, transfer shares, merge and list their shares on stock exchanges.
The proposed IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Indian Insurance Companies) Regulations (2024), seek to streamline processes for insurance companies.
One of the key reforms outlined in the proposed regulations is the elimination of the requirement for insurance companies to seek prior approval from the IRDAI before listing their shares on the stock exchange.
Instead, insurance firms will be able to directly approach financial regulators, provided they meet specific criteria. According to the insurance regulator, this move will expedite the process of listing shares, enhancing liquidity and investor confidence in the insurance market.
The proposed regulations also seek to relax stringent lock-in periods previously imposed on investors.
In instances where insurance companies are undergoing financial distress, or are engaged in mergers, the IRDAI will have the authority to grant exemptions from these lock-in requirements. This flexibility is expected to provide much-needed relief to investors and bolster the sector’s resilience during challenging times, the IRDAI said.
The regulations also propose simplifications regarding share transfer approvals for investors. Under the new framework, investors holding a stake of 5% or more in an insurance company will not require prior approval from the IRDAI for further share acquisitions, up to a threshold of 10%.
