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Title: The CEO of All Life insurers
Reference No.: IRDA/ F&I/NFTN/CIR/158/07/2012
Date: 24/07/2012
IRDA (Issuance of Capital by Life Insurance Companies) Regulations, 2011 –
To
The CEO of All Life insurers
Dear Sir,
IRDA (Issuance of Capital by Life Insurance Companies) Regulations, 2011 – Disclosure Requirements
The Authority has notified the IRDA (Issuance of Capital by Life Insurance Companies) Regulations, 2011 vide Government of India Gazette Notification no. 223 dated 14th November, 2011, (the Regulations) laying down the framework for life insurance companies to raise capital through public issue.
(I) Disclosure Formats
The Regulations lay down disclosure requirements applicable to life insurance companies at Annexure I thereof. These disclosure requirements are in addition to the stipulations laid down by Securities Exchange Board of India (SEBI) under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
While prescribing the disclosure requirement under the Regulations, it has been indicated that with respect to the following, the format of disclosures shall be as per the “prescriptions made by IRDA from time to time”:
(a) Risk factors specific to the insurance companies;
(c) Disclosure of Financial Statements; and
(d) Glossary of terms used in the insurance sector.
The formats of disclosures with respect to above referred clauses ‘a’, ‘c‘ and ‘d’ of the said stipulations are placed at annexure ‘A’, ‘B’ and ‘C’ to this circular. (Zip file)
(II) Embedded Value:
Para 6(vii) of the Regulations requires the applicant company to file the ‘Embedded Value’ of the insurance company as one of the prescribed enclosures to the application seeking the approval of the Authority in the prescribed Form ‘A’.
In tune with the requirements of the Regulations, the embedded value report is required to be prepared by an independent actuary and peer reviewed by another independent actuary. The said report is required to be prepared in compliance with the prescriptions laid down by the ‘Institute of Actuaries of India’ (IAI).
The IAI has since issued the said actuarial standard as Guidance Note 10. The Guidance Note is now available on the website of IAI.
Yours faithfully,
(R.K. Nair)
Member (F&I)
