Irdai to release exposure draft on listing of insurance firms

Mumbai, Aug 26 (PTI) To make listing of insurance firmscompulsory, sector regulator Irdai will soon release anexposure draft on the issue. So far, ICICI Prudential Life Insurance is the onlycompany to announce listing plans. "We have released a discussion paper on compulsory listingof insurance companies. Comments of the stakeholders willstart pouring in on the subject from now on," Irdai member(life) Nilesh Sathe told reporters on the sidelines ofan event here today. "Based on that, we will be releasing an exposure draft.Then we will come out with guidelines on the issue and giveenough time to the insurers so that their business models canbe worked out and their foreign partners are made comfortablefor the same," he said. The purpose of the discussion paper is to highlight thefact that listed companies will always have more stringentdisclosure norms. In addition to what has been prescribedunder the Companies Act, there will be additional disclosurenorms that will be required, Sathe said. Listing will allow a person having even a single shareof Rs 10 in the company to ask questions from management onits decisions and thereby help bring in more transparency intothe system, the Irdai member maintained. Commenting on the recent announcement of Max Life’smerger with HDFC Life, Sathe said "if insurers want to haveinorganic growth, merging is the best solution, as organicgrowth can’t be 100 per cent." According to Sathe, the performance of life insuranceindustry has been quite good this year. It was for the firsttime in the past five years that the life insurance industryposted a double-digit growth in terms of both premium incomeand number of policies sold in 2015-16. There has been a good growth on both fronts in the lifeinsurance industry in July, Sathe said. Highlighting the recent remarkable growth of groupfund-based business in the life insurance sector, he said "Themain reason is that the Government has increased the gratuityamount payable from Rs 3 lakh to Rs 10 lakh in the wake ofamendment in Gratuity Act." All these gratuities are payable by insurance firms.That is why they have funded more for the group business, hesaid, adding "however, it will not be the case in future." On Irdai’s recent bancasssurance norms allowing a bankto sell nine policies — three each from life, non-life andstand-alone health insurance — he said, "There are a goodnumber of banks which have applied for tie-ups with morenumber of insurance companies." PTI KD RSY JMMRJMF