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fied above or transfer of shares beyond the specified written request from the applicant company, extend the
limit under the Insurance Act, 1938 shall be subject to validity by a further period of 6 (six) months.
approval of the IRDA pursuant to the IRDA (Transfer of
Equity Shares of Insurance Companies) Regulations, The IRDA Capital Regulations have been notified after fac-
2015. Further, the applicant company could either is- toring in comments from industry players on allowing Indian
sue shares as fully paid up or partly paid up shares, pro- insurance companies not involved in life insurance business
vided that period for payment of calls on shares cannot giving access to public markets to raise funds through a
exceed 1 (one) year; public issue in accordance with ICDR Regulations. IRDA
would continue to evaluate various factors while granting
3. The General Insurance Corporation of India and the in- such approval, including if such issuance would be detrimen-
surance companies specified under section 10A of the tal to the interests of policyholders or the insurance busi-
General Insurance Business (Nationalization) Act, 1972 ness in the country.
("IB Nationalization Act") can apply for approval of IRDA
only on satisfactory compliance with the provisions of 2) Regulation on accounting standard in
section 10B of IB Nationalization Act; India involving entire insurance sector:
4. The promoters and/ or investors of the applicant com- 1. The Ministry of Corporate Affairs (MCA), Government
pany shall abide by the lock-in period, if any, specified of India has notified the Companies (Indian Accounting
by the IRDA at the time of grant of Certificate of Reg- Standards) Rules, 2015 on February 16, 2015. A
istration; reference is also invited to the Press Release dated
January 18, 2016 issued by the MCA outlining the
5. The applicant company shall make the application in the roadmap for implementation of International Financial
prescribed format. While considering the application, Reporting Standards (IFRS) converged Indian
IRDA may take into account, inter alia, the applicant Accounting Standards (Ind As) for banks, non-banking
company's overall financial position, the period for which financial companies, select All India Term Lending and
general insurance or health business or reinsurance Refinancing Institutions and Insurers.
business has been carried on by the applicant company,
its regulatory and compliance record, the purposes for 2. In this connection, it is advised that Insurers shall fol-
raising of capital, maintenance of the prescribed regu- low the Indian Accounting Standards as notified under
latory solvency margin, compliance with IRDA regula- the Companies (Indian Accounting Standards) Rules,
tions, rules and guidelines, including the corporate gov- 2015, subject to any guideline or direction issued by the
ernance guidelines, the Indian Insurance Companies Authority in this regard, in the following manner:
(Foreign Investment) Rules, 2015; (i) Insurers shall comply with the Indian Accounting Stan-
dards (Ind AS) for financial statements for account-
6. Amongst various conditions that IRDA may deem fit, ing periods beginning from April 1, 2018 onwards,
IRDA may prescribe certain conditions at the time of with comparatives for the periods ending March 31,
grant of approval which may relate to minimum lock-in 2018. Ind AS shall be applicable to both standalone
period for the promoters and investors from the date financial statements and consolidated financial state-
of allotment, dilution of shareholding, mandated disclo- ments. "Comparatives" shall mean comparative fig-
sures in the offer documents, amendments to the char- ures for the preceding accounting period.
ter documents of the applicant company, transfer re-
strictions; (ii) Insurers shall apply the Indian Accounting Standards
(Ind AS) only as per the above timelines and shall not
7. Approval of the IRDA shall not in any manner be deemed be permitted to adopt the Indian Accounting Stan-
to be or serve as a validation of the representations by dards (Ind AS) earlier.
the applicant company in any offer document and the
same has to be explicitly disclosed in the offer docu- 3. The Indian Accounting Standards (Ind AS) implementa-
ment; tion is likely to significantly impact the financial report-
ing systems and processes and, as such, these changes
8. The validity of the approval of the IRDA for issue of need to be planned, managed, tested and executed in
capital shall be 1 (one) year from the date of the ap- advance of the implementation date. Insurers are ad-
proval letter, within which the applicant company will vised to set up a Steering Committee headed by an
have to file the Draft Red Herring Prospectus (DRHP)
with SEBI under the ICDR Regulations. IRDA may, on The Insurance Times, July 2016 21
