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Sunday, December 11, 2011

guidelines initial public offer (IPO) for insurance company

guidelines initial public offer (IPO) for insurance company ; Insurance Regulatory and Development Authority (Irda) will shortly finalise public offer and listing norms for non-life insurance companies.

Irda is in the process of issuing draft guidelines for initial public offer (IPO) norms for general or non-life insurance companies. “Framework of listing norms for general insurance is already with Securities and Exchange Board of India (Sebi). However, due to some internal restructuring there is delay in the process. We will soon put norms in public domain,” said J Hari Narayan, chairman of Irda told Financial Chronicle.

Sebi committee on disclosures and accounting standards (SCODA) has already been sent outline for consideration. “As soon as necessary approvals are received from Sebi, Irda will proceed further with the norms and we expect to announce the final guidelines within next 30-45 days,” added Narayan.

However, norms would be different, as the calculation for valuing non-life companies is different from life insurance companies.

“There is significant difference between valuation of life insurance companies and general insurance companies. Life insurance company IPOs

would depend on embedded value of the insurer. We will have to wait for the draft to know how valuation will be done,” said Amarnath Ananthanarayanan, CEO of Bharti Axa General Insurance Company.

For life insurance companies, future value of business (premium from renewals) is kept in mind, while all non-life contracts are generally for one year. Their valuation can be calculated from gross premium underwritten or bottom line growth every year.

Insurers expect a minimum of 10 years operational experience in order to raise money from market. “One common aspect between these two norms may be the requirement of at least 10 years of operation. Both our insurance ventures are around four years old, and therefore, we have a long way to go before giving it a thought,” said KG Krishnamoorthy Rao, MD & CEO, Future Generali India Insurance Company.

Irda mandated life insurance companies to maintain a solvency margin of 150 per cent or 1.5 times of their liabilities. The company intending to list on stock exchange must also maintain solvency margin for at least six preceding quarters. For the latest updates on the stock market, visit Stock Market Today

valuation of life insurance companies and general insurance companies, Life insurance company IPOs, Irda ipo, India Insurance Company, liabilities For the latest updates PRESS CTR + D or visit Stock Market news Today

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