Insurers can’t approach SEBI directly
IRDA has issued an exposure draft outlining the guidelines for general insurance players to be public. According to the draft, insurers will need minimum 10 years of existence in the general insurance sector before launching their IPO. The approval granted by IRDA for an IPO will have a validity of one year. The applicant company has to file the draft red herring prospectus with SEBI within that one year.
“No general insurance company shall approach SEBI for public issue of shares and for any subsequent issue, by whatsoever name called, under the ICDR (Issue of Capital and Disclosure Requirements) regulations without the specific previous written approval of the authority concerned,’’ said the exposure draft.
The financial health, the regulatory records, IPO proposal per se, the capital structure post-issue and the purpose of capital-raising program of the applicant company will be scrutinized by IRDA before allowing the firm to float its IPO.
IRDA will reserve the right of not to accord its approval if the applicant company is not compliant with the regulatory framework; or where it may be detrimental to the interest of the policy-holders; or it may not be in the interest of the insurance business in the country, says the draft.
The regulator has invited the views of all stakeholders on the draft within one month.