-Investment through Special Purpose Vehicle (SPV) has been made optional for Private Equity (PE) Funds enabling them to directly invest in insurance companies, providing more flexibility,
Now, subsidiary companies are also allowed to be promotors of insurance companies (subject to certain conditions),
New Delhi:
The government has notified the new regulations on` Registration of Indian Insurance companies” finalised by the board of the insurance regulator IRDAI on November 25.
The amendments to regulations pertaining to registration of Indian insurance companies are aimed at promoting ease of doing business and simplify the process of setting up an insurance company in India.
Key highlights of the amendments are –
-Investment through Special Purpose Vehicle (SPV) has been made optional for Private Equity (PE) Funds enabling them to directly invest in insurance companies, providing more flexibility,
-Now, subsidiary companies are also allowed to be promotors of insurance companies (subject to certain conditions),
-Investment up to 25% of the paid up capital by single investor (50% for all investors collectively) will now be treated as ‘investor” and investments over and above that will only be treated as promoter”. [Earlier the threshold was 10% for individual investor and 25% for all investors collectively],
-A new provision has been introduced to allow the promoters to dilute their stake up to 26%, subject to condition that the insurer has satisfactory solvency record for preceding 5 years and is listed entity,
-Indicative criteria for determination of ‘Fit and proper’ status of investors and promotors has been included,
-Lock-in period of investments for investors and promotors has been stipulated on the basis of age of insurer.
Earlier