IRDAI lays out norms for share transfer of insurance companies

According to IRDAI sale, purchase and pledge of equity in excess of 5 per cent of an insurance company’s paid-up capital will need the regulator’s prior approval, and any violation of the guidelines will attract action. Issuing a clarification on the ‘transfer of share of the insurance companies’, the IRDAI said the provisions related to sale and purchase of equity will also apply on creation of pledge or any other kind of encumbrance over shares of an insurance company by its promoters. It further said ‘fit and proper’ norms should be followed for sale and purchase of equity above 1 percent and upto 5 percent of the paid-up capital. The application for transfer of shares, it added, should be filed through the insurance company concerned.