IRDAI today floated a draft circulation under which it asked general insurers to go for public issues if the situation so warrants.
"It (draft regulation) empowers the authority to issue directions to an Indian insurance company to go for IPO if the circumstance warrants so. Such a company within a period of one year from the date of such direction shall comply with these regulations," an exposure draft said.
The exposure draft on 'Insurance Regulatory and Development Authority of India (Issuance of capital by Indian insurance companies transacting other than life insurance business) Regulations, 2015' further said there will not be provisions for mandatory divestment.
It allows an insurance company to go for IPO subject to compliance of lock-in period specified at the time of grant of certificate of registration, it said.
However, it said a public sector general insurance firm can go for "IPO subject to compliance of the provisions of 10B of the General Insurance Business (Nationalisation) Act, 1972".
With regard to issuance of shares to public, it suggested that the company issue the equity as fully paid-up.
"In case partly paid-up shares have been issued, the applicant company shall not allow any period exceeding one year for payment of calls on the shares," it said.
No Indian insurance company transacting the non-life insurance or stand-alone health insurance or reinsurance business shall approach Sebi for public issue of shares and for any subsequent issue, without previous written approval of the authority, it added.
The regulation further said an applicant company proposing to raise share capital through a public issue in terms of these regulations may do so at any time from the date of registration by the applicant company.
However, it said the promoter shall abide by the lock-in period, if any, specified by the authority at the time of grant of certificate of registration.
