India’s insurance regulator has proposed to the government that insurers be allowed to buy over 10% of unlisted firms without approval, regulatory and industry sources said, a move that could unlock new funding avenues for startups in Asia’s third largest economy.
Currently, Insurance Regulatory and Development Authority of India (IRDAI) does not allow insurers to invest in unlisted entities without its permission.
IRDAI has sent a proposal to the government to allow buying a more than 10% stake in unlisted firms by insurers, using over 10% of the monies lying in their shareholders fund, policyholders fund, or funds maintained by a reinsurance company, according to the two sources, who requested anonymity.
“The finance ministry is considering IRDAI’s suggestion, and is looking to make the changes in the law,” one source said.
