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Saturday, Sep 19, 2009
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Business Daily from THE HINDU group of publications Saturday, Sep 19, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Insurance Money & Banking - Regulatory Bodies & Rulings Web Extras - IPOs Disclosure norms for insurance cos soon
The route towards IPO would have three milestones — finalisation of the Red Herring Prospectus, disclosure norms and valuation of insurance companies Our Bureau Mumbai, Sept. 18 The Insurance Regulatory and Development Authority (IRDA) is planning to bring out comprehensive disclosure guidelines for insurance companies by September-end. In the context of a few insurance companies planning to raise resources via initial public offering (IPO), these guidelines would be a significant move forward to standardise reporting procedures for companies. By month-endInsurance companies will have to adhere to the standards while making disclosures on a quarterly, half-yearly and annual basis. “The guidelines should be out by this month-end,” said Mr J. Hari Narayan, Chairman, IRDA, while speaking to reporters on the sidelines of a CII insurance summit. IRDA is trying to standardise reporting of figures such as claims ratio, claims settlement, valuation, investment portfolio, distribution channels, products offered and retention ratio of companies. Currently, the extent of disclosures varies across companies. The route towards IPO would have three milestones — finalisation of the Red Herring Prospectus (RHP), disclosure norms and valuation of insurance companies, said Mr Hari Narayan. IRDA is working with the SEBI on disclosures that need to be made mandatory in the red herring prospectus. Consultation process“The design, structure and disclosures required have to be finalised in consultation with SEBI,” the IRDA chief said. He pointed out that a few insurance companies have shown interest to go in for an IPO. Reliance Life Insurance and HDFC Standard Life Insurance are among the players that are looking to tap the IPO market.
On a more uniform method for valuation of insurance companies, Mr Hari Narayan said the Institute of Actuaries of India is working on a guidance note in this regard. “Once the guidance note is issued, companies will be mandated to follow these methods of valuation and make disclosures accordingly,” he said. However, he did not give a time frame as the institute is not regulated by IRDA. The regulator is putting this roadmap in case the Government relaxes the 10-year clause. Currently, insurance companies need to wait for 10 years from the date of inception to go public. Reliance Life has approached the Finance Ministry requesting waiver of this clause. IRDA to make more disclosures mandatory More Stories on : Insurance | Regulatory Bodies & Rulings | IPOs
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