IRDAI vide ref. no. IRDAI/Reg/9/188/2022, dated December 5, 2022 has issued “IRDAI (Registration of Indian Insurance Companies) Regulations, 2022.” (“Regulations”).
Objective : To promote ease of doing business and promote growth of insurance sector by simplifying the process of registration of Indian insurance companies.
Major highlights of the Regulations are as under:
- Co-operative societies are also permitted to carry on insurance business.
- Certain new definitions are introduced such as Foreign Promotors, Private Equity, Transfer of Shares etc.
- Definition of Indian promoter modified to include Subsidiaries subject to following conditions: To be listed entity Own source of funds independent of holding company Net worth of more than 500 cr Holding company is not subsidiary Non operative financial holding company
- Any other class of business as may be specified by the Authority has been introduced as a permissible class of insurance business apart from Life, General, Health and Reinsurance business.
- In accordance Regulation 5, following procedure shall be adhered for registration of the insurance business:
- No Objection Certificate : The applicant is required to obtain No objection Certificate (NOC) from IRDAI for incorporating a company or co-operative society which contains the words ‘insurance’, ‘assurance’ or ‘reinsurance’.
- R1 Approval – The approval issued by the Authority for filling Form IRDAI/R1 will be valid for a period of 3 months within which the applicant shall submit the duly filled Form IRDAI/R1 to IRDAI along with the requisite documents as prescribed and non-refundable fee of five lakh rupees The Chairperson of IRDAI after examining duly filled Form IRDAI/R1 may issue the application for registration i.e. Form IRDAI/R2.
- R2 Approval – The application in the Form IRDAI/R2 as per the specified format shall be accompanied by documents as prescribed and non-refundable fee of five lakh rupees The Authority, after examining the matters may issue the “R2” Approval subject to the conditions as may be prescribed.
- R3 approval – The Certificate of Registrations in IRDAI/R3 will be issued by the Chairperson subject to the conditions as prescribed
- Equity shares of the applicant are subject to a lock in period of 5 years for the investment at the time of or before grant of R3. Additionally, the Regulation also prescribes compliances pertaining to lock-in period applicable to equity shares at various stages of year of investments post grant of R3
- Regulation also prescribes the Fit and proper conditions applicable to the Promotors and investors, the Authority reserves the right to take action as it may deem appropriate in case the applicant, its promoters and/or investors are found to be not fit and proper at any stage
- The Private Equity funds may invest in the applicant in the capacity of promoter or investor in the manner as specified
- Unless prior approval of the Authority is obtained, the Registration of transfer of shares or issue of equity capital of an insurance company is prohibited which would result in change in shareholding, wherein: after the transfer, the total paid-up holding of the transferee in the shares of the insurance company is likely to exceed 5% percent of its paid-up capital; or the Nominal value of shares intended to be transferred by an individual, firm, group, constituents of a group, or body corporate under same management, jointly or severally exceeds 1% of the paid-up equity capital of the insurance company.
- For an insurer having foreign investment a majority of its directors, majority of its KMP’s and at least one among the chairperson of its Board, its MD and its CEO, shall be Resident Indian Citizen
- The Annual fees to be paid by the Insurance Company shall be higher of Ten lakh rupees Or 1/20 of 1% of total GWP direct by an insurer in India during the financial year or rupees ten crore whichever is less
Source category: IRDAI
Attachments
- /2022/124_Registration_of_Indian_Insurance_Companies_Regulations,_2022.pdf
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