Life insurers may soon float IPOs under new IRDA rules

Life insurance companies that have completed 10 years of operation and have strong financials may soon be allowed to raise funds from the capital market, going by the draft guidelines released by the Insurance Regulatory & Development Authority on Tuesday.

The proposed regulation said insurance companies that have completed 10 years of operation would be eligible to raise money through a public offer provided they meet other requirements.

In the proposed IRDA (issues of capital and disclosure requirements for life insurance companies) regulations, 2011, the regulator says no issuance or allotment of capital by an insurance company shall be in any form other than as fully paid up equity shares.

An insurance company planning public offer has to seek approval from IRDA and then approach capital market regulator Securities and Exchange Board of India (SEBI) for final approval. The objective of the public issue could be to augment solvency requirement and general corporate purposes.

"The authority shall consider the applicant company's overall financial position, the regulatory record and the proposal for issue of capital prior to giving its 'formal approval' to the proposal to get its shares listed on the  stock markets or raise funds through an issue of capital," the draft notice said.

IRDA has invited comments or suggestions from all stakeholders on the 'exposure draft' by 30 June.