“Insurance Regulatory and Development Authority of India (Issuance of Capital by Indian Insurance Companies Transacting Life Insurance Business) Regulations, 2015” outlines the requirements and procedures for Indian life insurance companies to issue capital. Here’s a detailed summary:
General Provisions
Title and Commencement: These regulations are titled as such and came into effect upon their publication in the Official Gazette.
Scope: Applies to all Indian companies engaged in life insurance business that are registered under the applicable laws.
Definitions
Provides clear definitions for terms such as “Applicant Company”, “Authority”, “Capital”, “Indian Insurance Company”, among others to ensure clarity and consistency in application of the regulations.
Application for Issuance of Capital
Pre-approval Requirement: An Indian life insurance company must obtain prior approval from the Authority before proceeding with capital issuance.
Application Process: The application process is detailed, including necessary documentation and the format in which information must be submitted.
Compliance and Disclosure Requirements
Disclosure Norms: The regulations stipulate comprehensive disclosure requirements to ensure transparency in the capital issuance process.
Compliance with Other Regulations: Companies must comply with all relevant IRDAI guidelines, corporate governance norms, and other regulatory requirements.
Procedures and Conditions
Evaluation of Applications: The Authority will evaluate the applications based on various financial criteria and compliance history of the applicant.
Issuance Mechanisms: Details the permissible mechanisms for capital issuance, including public offerings, rights issues, and private placements.
Oversight and Monitoring: Post-issuance, companies are subject to ongoing monitoring to ensure continued compliance with the stipulated conditions.
Role of the Authority
Approval Process: Specifies the conditions under which the Authority may approve or reject applications for capital issuance.
Power to Impose Conditions: The Authority may impose specific conditions as part of the approval process to safeguard the interests of policyholders and ensure the stability of the insurance market.
Special Provisions
Lock-in Periods: Describes any lock-in periods that may apply to shareholders after capital issuance, particularly for promoters and significant stakeholders.
Reporting and Record-Keeping
Post-Issuance Compliance: Companies are required to report their compliance with the conditions of the issuance periodically.
Amendments and Modifications: Companies may need to seek additional approval for any changes to the terms of the capital after issuance.
These regulations ensure that the process of capital issuance by life insurance companies is conducted in a manner that protects the interests of policyholders and maintains the financial stability and integrity of the insurance sector.
