Capital market regulator Securities and Exchange Board of India (SEBI) has cleared the decks for initial public offerings (IPOs) by life insurance firms, but the much-anticipated changes in the takeover code weren’t approved by the watchdog as discussions at its board meeting remained “inconclusive”.
Sebi chairman C.B. Bhave said apart from adhering to the extant norms that are sector neutral, domestic life insurers will also be required to disclose risk factors specific to insurance companies and an overview of the insurance industry in general, while raising money through a public issue.
There are 23 life insurers in India with at least Rs. 12 trillion in assets.Private insurers such as Reliance Life Insurance Co. Ltd, ICICI Prudential Life Insurance Co. Ltd and HDFC Standard Life Insurance Co. Ltd have announced plans to tap the capital market.
While approving the recommendations of the SEBI committee on disclosures and accounting standards, the market regulator said life insurers will also be required to disclose financial information in the formats specified by IRDA and disclose the glossary of terms used in the insurance sector.
It has exempted such insurers from the appointment of a monitoring agency. They would need an IRDA disclaimer in the offer documents.
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