SEBI sets disclosure terms for life insurance companies

MUMBAI - The Securities and Exchange Board of India (SEBI) has spelt out disclosure norms for the life insurance companies if they sell shares to the public through Initial Public Offer (IPO).

Board approved the recommendations for disclosure by insurance companies made by the SEBI Committee on Disclosures and Accounting Standards (SCODA).

“The question of public issues by Insurance Companies was considered by the SEBI Board and we are talking about the life (insurance company) and not non-life (insurance company). Board considered the recommendations of the SEBI Committee, which was formed in consultation with Insurance Regulatory and Development Authority (IRDA),” said SEBI Chairman C.B. Bhave.

“The board has approved certain additional disclosures having specific regard to disclosure of risk factors which are specific to insurance company, broad headings under each and overview the insurance industry shall be disclosed. Other disclosures specific to insurance company, formats for disclosure of financial information as specified by the IRDA and glossary of terms used by the insurance sector,” he added.

SEBI also tightened the guidelines on the preferential allotment by the companies.

“Board felt that further tightening of the preferential allotment framework was called for. Therefore it was decided that any promoter or promoter group, which has previously subscribed to the warrants of the company but fails to exercise the warrants such a promoter group will be ineligible for the issue of equity shares or convertible warrants in a preferential manner for a period of one year from the date of expiry of the currency or cancellation of the existing warrant,” said Bhave.

Board also wants the companies to specify the date of the dividends so that the shareholders get to know as and when they will get their dividends.

“Through the amendment of listing agreement we would require the companies to declare the pay date as well at the time of declaration of the dividend itself. This will help the shareholders to know when to expect the payments for their dividends that the company has announced,” said Bhave.

“The board also decided that similarly the date for credit of bonus shares will also have to be indicated by the company when bonus is declared,” he added.

The board decided to increase the maximum application size for retail individual investors to Rs. two lakh from Rs. one lakh across all issues. (ANI)