Let’s Connect

IRDAI Master Circular on Registration Regulation, 2024

IRDAI vide Circular bearing reference no: IRDAI/F&I/CIR/78/5/2024 dated May 15, 2024 issued Master Circular on Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers, 2024 (“Master Circular”), which repealed the following IRDAI Circulars:

1. Master Circular on Registration of Indian Insurance Companies dated April 24, 2023,

2. Circular on Exercise of ESOPs – Applicability of provision of section 6A(4)(b) of the Insurance Act, 1938 dated May 11, 2021.

3. Circular on Creation of Debenture Redemption Reserve bearing reference no. IRDAI/F&A/OFC/01/2014-15/115 dated August 04, 2017.

Major highlights of the Master Circular are as follows:

1. Applications to be Submitted:

a. The Application for issuance of a No Objection Certificate (‘NOC’) for registration of a New Insurance Company shall be filed online at www.irdai.gov.in . The Form for NOC for New Insurers Registration is prescribed under ‘ E-services ’ section on the above-mentioned website.

  • b. The Application for issuance of Form IRDAI/R1 shall be on the letterhead of the Applicant Company duly signed by the authorised person and it shall be submitted along with the following documents:
  • i. Certificate of Incorporation of the Applicant Company
  • ii.Copy of Memorandum of Association and Articles of Association of the Applicant Company,
  • iii. Certified Copy of Resolution passed by the Board of Promoter(s) of the Applicant Company for Approval for entering into the insurance business and authorising a person to act on behalf of the promoter(s).
  • iv. Certified Copy of Resolution passed by the Board of the Applicant for Approval for entering into the insurance business and authorising a person to act on behalf of the Applicant Company.
  • 2. Conditions for Employee Stock Option Plan (ESOP) or any other similar schemes
  • Insurer shall comply with Section 6A(4)(b) of the Insurance Act, 1938 (‘ Act ’) read with IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024 (“ Registration Regulations ”) for exercising Employee Stock Option Plans (ESOPs) or similar schemes for employees or directors.
  • i. If an insurer establishes a specific trust for ESOP issuance, shares allocation to the trust and exercise of options by employees shall fall within the ambit of Section 6A(4)(b) of the Act read with Registration Regulations, 2024.
  • ii. If the exercise of ESOPs by Key Management Personnel (KMPs) or Directors exceeds specified thresholds limits prescribed under Section 6A(4)(b) of the Act, Insurers shall require prior approval from the Authority, as per Regulation 22 of the Registration Regulations, 2024.
  • 3. Additional Requirements with respect to transfer of shares of Insurers: Insurers have been directed to comply with the following additional requirements with respect to the Application for transfer of shares:
  • a . Insurers may submit the details of Transferee to the Authority. (discretionary)
  • b. Insurers shall submit the Certified copy of Resolution passed by the Board of Insurers, approving the issuance of capital/offer for sale.
  • c. Insurers shall submit a duly filled particulars prescribed under Chapter II, Circular No. B.1.3 of the Master Circulars to the Authority.
  • 4. Intimation to the Authority with respect to the listing of equity shares of the Insurers: Insurer shall submit a confirmation duly signed by Chief Executive Officer (‘ CEO ’) in the format prescribed under Chapter II, Circular no. B.2 of the Master Circular along with the Intimation Letter for listing of equity shares.
  • 5. Additional Requirements with respect to submission of Notice of Intention to make an Application for implementation of scheme (Amalgamation or Transfer Insurance Business): Insurers shall submit the Notice of Intention for implementation of the scheme along with the following additional requirements mentioned in Chapter II, Circular No. C.1 (1) to C.1(23) of the Master Circular.
  • 6. Additional Requirements with respect to the Application seeking “in-principle” approval of the Authority for Amalgamation and transfer of shares of Insurers: The following additional documents shall required to be filed on the cover letter of the Insurer:
  • a. Proof of Payment of processing fees
  • b. Details of changes in the information submitted along with notice of intention.
  • 7. Additional Requirements post implementation of the Scheme: The Transferee Insurer within 30 days of the implementation of the scheme, shall furnish the additional documents specified under Chapter II, Circular No. C.3 (1) to C.3(3) of the Master Circular.
  • 8. Reporting Requirements with respect to issuance of instruments: Insurers issuing the instruments as per the Registration Regulations, shall within 15 days from the date of allotment, submit the duly filled particulars and signed by CEO in the format prescribed under Chapter II, Circular No. D.1 of the Master Circular.
  • 9. Process for remitting the annual fee post-issuance of Certificate of Registration: Insurers have been directed to remit the annual fee for the financial year in which CoR is granted and the financial year succeeding the financial year in which CoR is granted.
  • 10. Process for Cancellation of Certification of Registration of Insurers: Insurers may voluntarily surrender the CoR granted by the Authority and may request the Authority to cancel the same in the following cases
  • a. Insurer is not in the position to commence its operations, subsequent to grant of Certificate of Registration, within the stipulated time.
  • b. The business or a class of the business of the insurer has been transferred to any person pursuant to the Order of the Authority to this effect.
  • c. The business or a class of the business of the insurer has been transferred to or amalgamated with the business of any other insurer after obtaining approval of the Authority.
  • 11. Submission of Returns: Insurers within 30 days of every quarter shall submit the shareholding pattern and “Fit and Proper” Declaration as per the formats specified in the Master Circular on Submission of Returns.
  • 12. Pertaining to Directorship: Insurers have been directed to vacate the existing board positions which are not in compliance with Regulation 16 of the Registration Regulations.

Source category: IRDAI

Attachments

  • /2024/392_Master_Circular_on_Registration,_Capital_Structure,_Transfer_of_Share.pdf

Comments are closed