IRDAI nod not needed for issuing preference shares, subordinate debt

In a bid to promote ease of doing business, insurance regulator IRDAI has decided to do away with the prior approval requirement for raising capital through preference shares and subordinate debts by insurers.

The decision was taken in the board meeting held recently, sources said.

As per the decision, the issue of Other Forms of Capital (OFC) should not exceed 50 per cent of the paid-up share capital or net worth of the insurance company.

The board has also done away with the prior approval requirement for exercising the call option under OFC subject to a solvency ratio not less than 180 per cent.