New Delhi: India's Insurance Regulatory and Development Authority has issued draft initial public offering guidelines for general insurance companies, paving the way for the government to offload stakes in state-run non-life insurers.
General insurers with completion of 10 years from the date of starting operations, or such other period as may be specified by the government will be allowed to float the public issue, IRDA said in a statement.
All the four state-run general insurers -- New India Assurance Co, National Insurance Co Ltd, Oriental Insurance Co Ltd and United India Insurance Co Ltd -- have completed 10 years of operation.
However, most of the private sector general insurers like Bharti AXA General Insurance and SBI General Insurance may not qualify to hit capital markets if this guideline is accepted.
The draft guidelines also stipulate that general insurers must not approach market regulator Securities and Exchange Board of India for public issue of shares and for any subsequent issue without the "specific previous written approval of the IRDA".
Moreover, the guidelines said that no allotment of capital by a non-life insurer can be in any form other than as fully-paid equity shares.
Furhter, IRDA's approval for capital raising to a general insurer will be valid only for a year from the date of issue of approval letter, the statement said.
Non-life insurers are invited to submit their suggestions on the draft norms by September 30, the statement added.
Earlier December 2011, IRDA notified initial public offering guidelines for life insurance companies.
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