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IRDAI eases investment and solvency norms, allows corporate agents up to 9 tie-ups

The insurance regulator said the amendments will promote ease of doing business and simplify the process of setting up an insurance in India.

November 28, 2022 / 09:11 AM IST

Insurance promoters will now be able to dilute their stake up to 26 percent, the Insurance Regulatory and Development Authority of India (IRDAI) has said. The dilution, however, will be linked to the insurer being a listed entity with a ‘satisfactory’ solvency record for the preceding five years.

It also made the investment through Special Purpose Vehicle (SPV) optional for private equity (PE) funds, allowing them to directly invest in insurance companies.

This apart, corporate agents, including banks, will now be allowed to tie up with nine insurers (up from three), and insurance marketing firms can distribute products of six insurers (up from two earlier) in each line of business - life, general, and health insurance.

Insurance companies will now be permitted to raise capital in the form of subordinated debt and preference shares without prior approval from IRDAI.