Insurance watchdog Irda said on Wednesday guidelines for public float of life insurance companies will be ready by early February."Our regulation for initial public offers of life insurance companies must be ready in two to three weeks," Insurance Regulatory Authority of India chairman J Hari Narayan told reporters on the sidelines of Insurance Brokers Association of India summit.
In October last year, market regulator Securities and Exchange Board of India had approved life insurance companies to issue IPOs.
As per the draft guideline compiled by Irda, insurance companies which are in operation for the last 10 years would only be eligible for coming out with IPOs.
Also, the present IPO guidelines of Sebi requires a three years track record of profit for a company to float a public issue.
However, the non-life insurance companies will have to wait a few months to hit the capital market as Irda is in the process of making a formal proposal to Sebi.
"For non-life IPO, we are still to make a formal proposal to Sebi. The proposal is ready. . . the calculation of economic capital (of non-life insurance companies)
that is taking a little time. . . then we will go forward," Narayan added.
Several private sector insurers, including Reliance Life and HDFC Standard Life, have already shown interest in tapping the capital market to augment their resource base.
Though HDFC Standard Life has completed 10 years of operations, Reliance Life does not meet this criterion.
As per the disclosure norms in offer document mandated by Sebi, the insurers would have to come up with disclosure of risk factors specific to the companies.
Also the offer document would have a glossary of terms used in the insurance sector.
Currently, most of the 22 private life insurers and 17 non-life players have foreign partners.
The Insurance Act caps foreign direct investment at 26 per cent.
