Insurance watchdog IRDA on Tuesday said the final guidelines to allow life insurance companies to raise funds from the capital market will be out by this month-end.
"With regard to life companies, the work on IPO guidelines is more or less complete and we would be going for gazetting the same as regulation very shortly, perhaps toward the end of this month," IRDA Chairman J Hari Narayan told reporters on the sidelines of a FICCI event in New Delhi.
For life companies, the clause mandating a three-year track record of profitability as a precondition for tapping the capital markets has been removed in the draft guidelines, he said.
As per existing Securities and Exchange Board of India (SEBI) norms, any company which proposes to come out with a public offer should have a three-year track record of profits.
"As regards non-life companies, there is little more work to be done and that may take 2-3 months," he said.
Last month, IRDA had released a set of draft guidelines for insurance companies to raise funds through public
offers.
As per the draft norms, only insurance companies that have completed 10 years of operation and have strong financials will be allowed to access the capital market.
Insurance firms planning public offers have to seek 'formal approval' from IRDA and then approach the Securities and Exchange Board of India (SEBI) for final approval, the draft norms had said.
As part of the eligibility criteria, the insurance company should have maintained the prescribed regulatory solvency margin during the preceding six quarters, it had said.
In addition, the insurance company should have embedded the value of at least twice its paid-up equity capital, the guidelines had said, adding that the insurance company should be fully compliant with the corporate governance guidelines issued by IRDA.
Hari Narayan said IRDA will come out with a standard definition of critical illness for health insurance purposes within the next 2-3 months.
Asked if the insurer can invest in Indian Depository Receipts, he said, "An IDR is essentially investment abroad and according to the Insurance Act, money should be invested in India. There is a legal matter which we are examining."