IRDAI today came out with draft guideline to allow private sector insurance companies to raise money in the form of preference shares, debentures and other subordinated debts.
"The draft regulations allows an insurer to have other forms of capital in the form of preference shares, debentures and other debts as may be approved by the authority," Insurance Regulatory and Development Authority of India (IRDAI) said in an exposure draft.
The insurance regulator, however, added issuance of "Other forms of capital" shall be subject to the prior approval of the authority.
Elaborating it further, IRDAI said the authority shall consider issued and paid-in full in cash before granting the approval to instrument.
"An Indian insurance company may call back the preference shares or subordinated debts so issued only after a minimum period of five years subject to the prior approval of the authority and on satisfying the various conditions as laid down in the regulations," IRDAI said.
The regulator asked stakeholders to send their comments on proposed regulations by September 10.
