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Wednesday, October 3, 2012

IRDA to finalise IPO norms for non-life insurers soon

Insurance regulator IRDA will soon finalise IPO norms for non-life insurance companies as well as regulations on amalgamation of life insurance companies.

"This year we have finalised the amalgamation of life and IPO of non-life. So these two will be made regulation soon. The insurance advisory council has already met… that is the penultimate step," said J. Hari Narayan, Chairman, IRDA, on the sidelines of CII’s 6th Health Insurance Summit 2012 here today.

"Then it goes to the board and then it is presented."

He also said that IRDA was in favour of an increase in foreign direct investment limit in insurance companies.

"Absolutely (I am in favour of 49 per cent). I do think unless we go for 49 per cent we will not have the kind of capital required to underpin the growth of insurance industry. This sector requires lot of money, so unless we enable inflow...," Hari Narayan said, when asked if he was in favour of a hike in FDI to 49 per cent.

If banks can have FDI limit of 74 per cent, asset management companies can have 100 per cent, there is no reason why it should only be 26 per cent for insurance companies. "We should increase that (FDI in insurance)."

Currently, FDI limit in insurance is capped at 26 per cent. Any hike in FDI limit requires legislative change and approval of Parliament.


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