IPO & cashless policy norms soon, says Irda

Written by Press Trust of India | New Delhi | Updated: Aug 1 2010, 05:10am hrs
Insurance regulator Irda on Friday said it would finalise guidelines for initial public offer by general insurance companies in a couple of months. The proposed IPO guidelines for life insurance firms are being examined by a Sebi body and will be issued shortly, it added. The regulator also said it will soon come out with draft norms that define terms like critical illness and hospitalisation cost, among others, a move that will reduce the scope for disputes between insurers and hospitals. I carry with me the draft regulations. It will be out soon, Irda chairman J Harinarayan said at a Ficci health insurance conference.

The IPO guidelines will deal with minimum norms that a company must fulfil before hitting the capital markets. As regards the non-life companies, a lot of work has to be done on valuation and (guidelines) should be ready in a couple of months. For life industry IPO guidelines, the matter is with a body of Sebi. It would be coming out shortly. When asked whether the proposed guidelines would have a provision that insurance companies will have to be in operation to float IPO, he said, Yes, this is the government norm.

As per the Insurance Act, promoters having 26% stake can offload equity after 10 years of operation. The legislation also empowers the government to reduce the mandatory period. Irda had already notified the disclosure norms necessary to provide operations and balance sheets details on quarterly and yearly basis.

Apart from state-owned Life Insurance Corporation, 22 private companies are offering life insurance policies.

The general insurance sector has 21 players, including four state-owned companies. Several private sector insurers, including Reliance Life and HDFC Standard Life, have shown interest in tapping the capital market to augment their resource base.

Meanwhile, private hospitals will resolve their dispute with state-owned insurance firms and restore cashless treatment under mediclaim policies within 10 days, Naresh Trehan, heart surgeon and member of a conciliatory group, said.

Within the next 10 working days, insurance companies and hospitals would work out a solution, he said, adding that the cashless facility would be restored soon. Trehan, who has promoted Medanta The Medicitwas speaking to reporters after a CII-initiated meeting of private hospitals with representatives of four insurance companies New India Assurance, United India Insurance, National Insurance and Oriental Insurance.

All 150 hospitals have partially restored the cashless facility for emergency, ICU, cardiac care and trauma, he said. From July 1, public sector insurance companies had taken off about 150 hospitals from its list of preferred provider network, which provides cashless hospitalisation services to policy holders under the Mediclaim scheme.