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Tuesday, 06 July 2010 05:51 |
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Sebi, Irda working on insurance IPOs
Anto Antony
Updated: Tuesday, Jul 06, 2010 at 0124 hrs IST
New Delhi: Life insurance majors like SBI Life Insurance, HDFC Standard Life, Reliance Life and ICICI Prudential may be able to launch initial public offers in the current fiscal itself as the insurance regulator Irda and capital market regulator Sebi, fresh out of a turf war, have resumed the process for listing these companies. The necessary guidelines are under preparation.
The insurance regulator has already restarted consultations with Sebi to prepare the final draft on the valuation method to be adopted in the case of insurance companies, sources said. “In simple terms, the embedded value of a life insurer is the sum of the adjusted net worth and the value of in-force business allowing for the cost of solvency margin held. In consultation with Irda, we will soon come out with a method for calculating this,” said a Sebi official involved in the process.
Disclosure requirements for insurance companies intending to list are in the final form and are likely to be released by the end of the month.
Sebi will also have to take a call on the requirements to be fulfilled by the companies while filing the red herring prospectus.
Towards the end of last fiscal itself, Irda had conducted consultations with insurance companies and the Institute of Actuaries regarding the valuation method to be followed. “We were expected to discuss this in detail with Sebi in January itself and meetings were scheduled, which did not take place due to certain unforeseen reasons,” said an Irda official.
The turf war over regulating annuity products and Ulip schemes started last December, with Sebi pulling up HDFC Standard life for not seeking its permission before launching an annuity product.
There are 23 life insurance companies in India, of which only three have managed to break even.
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