Highlights of IRDAI (Transfer of Equity Shares of Insurance Companies) Regulations 2015

    Highlights of IRDAI (Transfer of Equity Shares of Insurance Companies) Regulations, 2015
    Highlights of IRDAI (Transfer of Equity Shares of Insurance Companies) Regulations, 2015:
    Important Points from IRDAI (Transfer of Equity Shares of Insurance Companies) Regulations 2015 were given here which was most important Insurance Awareness Topic for upcoming insurance exams.

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    ·        According to the notification, all investors (where there are one or more investors in an insurance company) jointly should not hold more than 25 percent of the paid-up equity share capital of the insurance company.

    ·        Further, with reference to the proposals pertaining to the transfer of shares in insurance companies, the authority said it might ask Indian promoters as well as foreign investors to have minimum lock-in period for infusion of additional capital as a pre-condition for approval.

    ·        It will also carry out its own ’due diligence’ before approving any deal for transfer of shares of insurance companies. The applications seeking prior approval of the authority should be accompanied by a declaration from a proposed shareholder whether the shares are proposed to be held for his own benefit or as a nominee, whether jointly of severally, or on behalf of others.

    ·        No registration of transfer of shares or issue of equity capital of insurance company which will result in change in the shareholding should be made if after the transfer the total paid-up holding of the transferee in the shares of the insurance company is likely to exceed 1 percent of its paid-up equity capital, the notification said.

    ·        Why are the new norms significant? The new norms are significant in the backdrop of the recent hike in the upper cap of foreign direct investment in insurance companies from 26 percent to 49 percent, which has already triggered some action on this front. Some foreign stakeholders have expressed their intent to raise their stakes and rejig of existing investors might also take place.

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