IRDAI (Registration of Indian Insurance Companies) (Seventh Amendment) Regulations, 2016

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IRDAI notified the IRDAI (Registration of Indian Insurance Companies) (Seventh Amendment) Regulations, 2016 (‘Registration Regulations’) on February 22, 2016. The key change introduced is with respect to the manner of calculation of equity capital held by foreign investors[1] in an insurance company, which is to be calculated as an aggregate of:

i. The quantum of equity paid up capital held by foreign investors (including FVCI); and

ii. The proportion of the paid up equity capital held or controlled by such foreign investor either by itself or through its subsidiary companies in an Indian promoter/ investor of such insurance company. This does not apply to Indian promoters/ investors which are banking companies or public financial institutions.

On May 20, 2016, the IRDAI has issued an exposure draft for further amending the Registration Regulations, whereby it has been proposed that item (ii) above will not apply to an Indian promoter/ investor of a listed Indian insurance company regulated by RBI, SEBI or the National Housing Bank.

[1]     ‘Foreign Investors’ has been defined under the Indian Insurance Companies (Foreign Investment) Rules, 2015 to mean all eligible non-resident entities or persons resident outside India investing in the equity shares of an Indian insurance company, as permitted under applicable foreign exchange regulations.

 

Published In:Inter Alia - Quarterly Edition - July 2016 [ English Chinese japanese ]
Date: July 1, 2016