The guidelines for initial public offers (IPOs) by life insurance companies would be released early next month, the Insurance Regulatory and Development Authority (Irda) said on Wednesday. Non-life insurers might have to wait for a few more months, though.
“Our regulations regarding IPOs of life insurance companies must be ready in two to three weeks,” Irda Chairman J Hari Narayan told reporters on the sidelines of a summit by the Insurance Brokers Association of India.
In October, the Securities and Exchange Board of India (Sebi) had allowed life insurance companies to launch public offers. Many private sector insurers, including Reliance Life and HDFC Standard Life, have shown interest in launching IPOs.
Besides the Sebi guideline requiring a company to be profitable for at least three years before coming out with an IPO, Irda’s draft guidelines require them to be in operation for the last 10 years. It takes six to seven years for an insurance company to break even.
“As far as non-life companies are concerned, we are yet to make a formal proposal to Sebi. The proposal is ready...the calculation of economic capital is taking a little time. We will then go forward,” Narayan said.
The insurance regulator would also come up with draft guidelines on health insurance portability by February-end. This would allow policyholders to carry forward their financial bonuses and pre-existing diseases while shifting from one insurer to another. As of now, portability is only for motor insurance policies.
Irda is also drafting regulations regarding nuclear accidents.
“We are in the early stages (of the regulation). This involves huge risks. We will first have to constitute a pool which will be a member of the larger global pool (of nuclear accident insurance). That is yet to be figured out,” Narayan said.
