The IRDAI has released an exposure draft of a new regulation to promote the growth of the insurance sector by simplifying the registration of insurers, transfer of shares, other forms of capital, amalgamation of insurers, listing of shares of insurers on stock exchanges, improving the ease of doing business and ensuring the protection of policyholders’ interests.
The following are some of the major changes proposed in the draft:
a. Remove the requirement of prior approval by the IRDAI for the listing of shares of insurers on stock exchanges subject to compliance with specified conditions.
b. Provide for relaxation of the lock-in period in case the insurer or the shareholder is in financial distress or to facilitate the amalgamation of insurers or shareholders.
c. Provide more clarity on the capital structure of the applicants seeking new registration.
d. Provide more clarity on the applicability of the requirement of prior approval for the transfer of shares.
The Regulation, when finalised, may be called the Insurance Regulatory and Development Authority of India (Registration, Capital Structure, Transfer of Shares and Amalgamation of Indian Insurance Companies) Regulations, 2024.
As part of the comprehensive review of regulations, the IRDAI asked Insurance Councils to submit their recommendations on the matters covered by the exposure draft. The Councils constituted the Regulations Review Committee (RRC) that recommended the new regulation which constitutes the consolidation of seven regulations covering the registration of Indian insurance companies, capital, manner of assessment of compensation to shareholders or members on amalgamation, schemes of amalgamation and transfers of life insurance and general insurance businesses.
After consideration of the recommendations of the RRC, the exposure draft was prepared.
Feedback on the exposure draft is to be submitted to the IRDAI by 23 February 2024.
