Irda to take call on PE funding soon

The Insurance Regulatory Development Authority of India (Irda) will come out with a decision in a month’s time on allowing private equity (PE) firms to buy stake in insurance companies, its chairman, T S Vijayan said.

“In insurance companies, we look at it in two different ways—investors and promoters. Anybody can invest in the company, for promoter, we are studying what is the feasibility, if at all somebody is coming, what are the conditions that need to be in place,” said Vijayan while, inaugurating an Assocham Global Insurance Summit.  “We have put a team, we are legally examining it and we will take a decision in a month or so,” added the Irdai chairman.

He also informed that though Irda has just formed a committee for risk based capital model but gave no deadline for its introduction.

“In Irda, we have things like 150% of solvency margins irrespective of numbers etc, we are trying to move towards risk-based capital model. We have started forming a committee and have started discussion, it will take time,” said Vijayan.

“The knowledge papers are prepared, and the committee will take some time to evaluate that because we have factor-based capital so far and frequent changes are not good in this. We are evaluating, studying, taking opinions from the industry and professionals and going forward, there is no time frame as of today,” he added.