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Insurance Regulatory and Development Authority of India (Irdai), in its final norms on transfer of equity shares of insurance companies, has said that no registration of transfer of shares or issue of share capital can be made which would result in the shareholding change.
It has said that no Indian investor in an insurance company can hold more than 10 per cent of its equity capital.
It added that all such investors jointly cannot hold more than 25 per cent of paid-up equity share capital.
The regulator said that, where, after the transfer, the total paid-up holding of the transferee in the share of insurance company is likely to exceed five per cent of its paid-up capital, this will not be approved.
Irdai said that no such transfer can be made where the nominal value of the shares intended to be transferred by individual, group under same management exceeds one per cent of the paid-up equity capital of the insurance company.
The regulator said that they would conduct their own due diligence for approval of such a transfer. Further, it said that may also prescribe conditions such as minimum lock-in period and infusion of additional capital to maintain solvency.
