Insurance Regulatory and Development Authority (IRDA) have come out with final public disclosure guidelines, towards Initial Public Offer (IPO) norms for insurance companies, which would come into effect from March, 2010.
IRDA said most of the Insurance companies will soon complete a decade of its presence and it may be allowed to go for public offerings. However, it is very necessary for the prospective investors to know about the financial performance, profile, financial position, risk exposure and managements of insurance companies. And the data shall preferably be made available for at least 5 years of its operations.
IRDA has separated company website and newspaper disclosures. It has asked the Insurance companies to publish its Balance Sheets, profit & loss accounts, revenue accounts and key analytical ratios on a quarterly, half-yearly and yearly basis from March onwards.
Moreover, it has asked the Insurance companies to disclose segment-wise reports on their website on quarterly, half-yearly and yearly basis.
Last year in October, IRDA had come out with a draft on disclosures for feedback.
The disclosures will remain same for the companies going to hit the market. However, IRDA has standardised key analytical ratios for life and non-life insurance companies. Where, Insurers have been asked to put up disclosures for a minimum of 5 years.
Meanwhile, IRDA plans to come out with the IPO guidelines for insurance companies by the end of next month while they are awaiting Institute of Actuarys guidance note on Economic Capital calculation.
However, once that is done, they will be in shape and will come out with the IPO guidelines by February end stated Insurance Regulatory Development Authority (IRDA) chairman, J Hari Narayan.
Economic Capital (EC) refers to a level of capital that a firm should maintain to support its strategic objectives, taking into account the nature and extent of the risks it is running.
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