IRDAI on Thursday said sale, purchase, and pledge of equity in excess of 5 per cent of an insurance company's paid-up capital will need the regulator's prior approval, and any violation of the guidelines will attract action.
Issuing a clarification on the 'transfer of share of the insurance companies', the Insurance Regulatory and Development Authority of India (IRDAI) said the provisions related to sale and purchase of equity will also apply on the creation of pledge or any other kind of encumbrance over shares of an insurance company by its promoters.
It further said 'fit and proper' norms should be