Insurance Companies

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IRDAI Regulatory Reform Series: Listing of Indian Insurance Companies on Stock Exchanges

Background

On March 20, 2024, the Insurance Regulatory and Development Authority of India (“IRDAI”) notified the IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024 (“Registration and Capital Regulations”), which consolidated and rationalised the regulatory framework applicable on an Indian insurer in aspects, including listing on a stock exchange pursuant to an initial public offer (“IPO”) that may consist of a fresh issue of equity shares or an offer for sale. Our detailed analysis on the other aspects of Registration and Capital Regulations can be found here.Continue Reading IRDAI Regulatory Reform Series: Listing of Indian Insurance Companies on Stock Exchanges

IRDAI Regulatory Reform Series: Registration and Capital Structure of Indian Insurance Companies

Background

The Insurance Regulatory and Development Authority of India (“IRDAI”) has a statutory duty to regulate, promote and ensure orderly growth of the insurance business and reinsurance business in India. Based on the IRDAI’s initiative to promulgate consolidated and principle-based regulations to govern the insurance industry, the Life Insurance Council and General Insurance Council (representative bodies of life and general insurers, respectively) constituted the Regulation Review Committee (“RRC”) to review the entire insurance regulatory framework and recommend principle-based regulations.Continue Reading IRDAI Regulatory Reform Series: Registration and Capital Structure of Indian Insurance Companies

Recommendations on Changes to SEBI ICDR Regulations for Ease of Doing Business – Missing the Point

On January 11, 2024, SEBI issued its consultation paper on interim recommendations of its expert committee to harmonise the SEBI ICDR and LODR regulations.  The public has been invited to share comments on this paper.Continue Reading Recommendations on Changes to SEBI ICDR Regulations for Ease of Doing Business – Missing the Point

Indian Regulatory Perspective on Non-traditional Reinsurance Solutions

Introduction

A dynamic risk market demands insurance companies to constantly seek new solutions to manage their capital and risk position. This position is further challenged by volatile financial markets, low interest rates, and of course, competition. As insurers assess their risk appetite and aim to achieve an optimal balance of risk, reinsurance solutions have proved to be an effective solution. While traditional reinsurance solutions are effective tools for risk management, ‘Non-traditional Reinsurance Solutions’, are oriented towards providing specific business solutions rather than pure risk transfer. In this piece, we discuss the insurance regulatory framework around Non-traditional Reinsurance Solutions in India.Continue Reading Indian Regulatory Perspective on Non-traditional Reinsurance Solutions

Remuneration to Directors and KMPs of Insurers – Enhanced Guidelines with Extended Coverage

Introduction

The remuneration payable to Chief Executive Officers (“CEOs”), Whole-Time Directors (“WTDs”) and Managing Directors (“MDs”) of insurance companies is governed under Section 34A of the Insurance Act, 1938. This provision requires insurers to procure prior approval from the Insurance Regulatory and Development Authority of India (“IRDAI”) in relation to such remuneration. The IRDAI (Remuneration of Non-Executive Directors of Private Sector Insurers) Guidelines, 2016 and IRDAI (Remuneration of Chief Executive Officer/Whole Time-Director and Managing Director of the Insurers) Guidelines, 2016 dated August 5, 2016 (collectively, the “Erstwhile Guidelines”) have historically governed this matter. In supersession of the Erstwhile Guidelines, the IRDAI has recently notified the Guidelines on Remuneration of Directors and Key Managerial Persons of Insurers, on June 30, 2023, which includes the IRDAI (Remuneration of Non-Executive Directors of Insurers) Guidelines, 2023 and IRDAI (Remuneration of Key Managerial Persons of Insurers) Guidelines, 2023 (collectively, the “Revised Guidelines”). The Revised Guidelines are effective from the FY 2023-24 i.e. from April 1, 2023 and the insurers are required to complete the process of framing/reviewing the remuneration policy within three months of the issuance of the Revised Guidelines.Continue Reading Remuneration to Directors and KMPs of Insurers – Enhanced Guidelines with Extended Coverage

Mergers & Acquisitions

Context

Convergence of the Indian Accounting Standards (“Ind AS”) with the International Financial Reporting Standards (“IFRS”) can be regarded as the most significant milestone in the Indian accounting paradigm, which has fundamentally altered the rules for the preparation and interpretation of financial statements (“FS”) as also the ground rules for structuring M&A deals.Continue Reading How crucial is knowledge of Ind AS while negotiating an M&A deal?