Indian Insurance companies can now hold up to 15% sharee in any firm, up from 10% at now, as the Insurance regulator IRDA (Insurance Regulatory and Development Authority) yesterday permitted raising of the investment limit.
The decision comes on the back on Finance Ministry pitching for raising equity investment limit for insurance behemoth LIC of India to up to 30%.
IRDA said in a statement, "Insurance firms will now be allowed to increase their exposure in equity shares in a given firm from the present level of 10% to a higher level of 12% and 15% depending upon the size of the Controlled Fund of any given insurer. The move is in line with the growing size of funds managed by the insurance companies & would not have any adverse affect on the financial health of the insurer. The Authority believes that this is commensurate and appropriate given the size of funds under consideration without adversely affecting the prudential management of investments"
The move comes nearly 4 years after IRDA amended investment norms to prohibit an insurer from holding more than a 10% share in a company.
Differences had emerged between Finance Ministry and IRDA over the issue of raising investment limit for LIC of India. The Ministry proposed to raise the limit up to 25% in case of LIC of India, while the regulator IRDA had its reservation.
The IRDA said LIC was at par with all other private insurers & it would be imprudent to raise the cap specifically for LIC of India to 30%.
The board of the IRDA also approved the health insurance regulations that will enable development of a more robust, consumer friendly insurance system in India.
The board also approved a standard proposal form to capture full details of a policyholder in accordance with the KYC norms for sale of life insurance products which would be mandatory after 6 months. This, the IRDA said, would improve "the service levels to prospective policyholders and to further minimise the chances of mis-sale".
No comments:
Post a Comment