IRDAI Issues Clarification on the Classification of Shares Issued by Virtue of Demerger to Insurance Companies

virtue of Demerger to Insurance Companies

On 19th January 2023, the Insurance Regulatory and Development Authority of India issued a Circular in regard to Clarification on the Classification of Shares issued by virtue of Demerger to Insurance Companies.

Through the exercise of powers, as conferred under Regulation 17 of the IRDAI Investment Regulations, 2016, it has been henceforth clarified that the dividend criteria as stipulated under Regulation 3 (a) (4) and 3 (a) (5) of IRDAI (Investment) Regulations, 2016 to be read with Clause 1.11 of the IRDAI Investment Master Circular issued on 27th October 2022 deemed applicable to be the “Demerged Company” is to be reckoned for the purpose of classification of investment, in equity shares and preference shares in “Resulting Investee Company(s), as “Approved Investment” or “Other Investment”, for initial two financial years.

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