Report on  
              Public Issues by 
         Insurance Companies  
                                
                                
        SEBI Committee on Disclosures and Accounting 
                     Standards (SCODA) 
                                
                                
                                
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                                               Table of contents 
                Section No                               Section                              Page 
                                                                                            Number  
                       1           Background                                                    3 
                                                                                                  
                       2           Constitution of the Sub-group                                 3 
                                                                                                  
                       3           Scope of the Sub-group                                        4 
                                                                                                  
                       4           Recommendations of Sub-group                                  4 
                                                                                                  
                       5           Other issues raised by IRDA                                  10 
                                                                                                  
                
                                                 List of Annexure 
               Annexure              Details of Annexure                                          Page 
               Number                                                                             No. 
               Annexure  I           Industry specific risk factors for insurance sector          13 
               Annexure II           Overview of Insurance Industry                               21 
               Annexure III          Comparison table on disclosures made in offer                23 
                                     documents of life insurance companies in other 
                                     jurisdictions 
               Annexure IV           Glossary of terms used in Insurance Industry                 29 
                                                             
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                               Public Issues by Insurance Companies 
                                                                            
                  1.  Background: 
                        1.1. There have recently been media reports that insurance companies in India are planning 
                             to  raise  money  from  the  capital  market  through  initial  public  offers.  Till  now,  no 
                             company from the insurance sector has accessed the capital markets in India. Since the 
                             nature of business and risks involved in insurance sector are of a different kind, it was 
                             felt that there is a need to review whether the present disclosure requirements in offer 
                             documents as well as those on a continuous basis are suitable and sufficient for the 
                             insurance companies. 
                        1.2.  In this context, SEBI has been in receipt of suggestions/ observations from merchant 
                             bankers  and  international  consultants  on  additional  insurance  sector-specific 
                             disclosures.  SEBI  has  also  received  suggestions/comments  from  IRDA  on  the 
                             disclosures in offer documents by insurance companies. The areas of disclosures as 
                             identified  taking  into  account  the  practices  followed  in  other  jurisdictions  and 
                             suggestions/ comments of the merchant bankers and IRDA were discussed in the SEBI 
                             Committee on Disclosures and Accounting Standards (SCODA) in its meeting held on 
                             August 24, 2009.  
                       1.3.  SCODA during its deliberations suggested that the suitability/sufficiency of the existing 
                            provisions of SEBI (ICDR) Regulations to insurance companies may be examined.  
                             
                  2.  Constitution of the Sub-group: 
                        2.1.In  order  to  examine  the  extant  regulatory  requirements  vis  a  vis  the  disclosure 
                             requirements  for  insurance  companies,  SCODA  decided  to  constitute  a  sub-group 
                             comprising following members: 
                  Sl      Name                           Designation                  Organization 
                  1.      Ms. Dipti Neelakantan          MD & Group COO               JM Financials Ltd 
                  2.      Shri Prithvi Haldea            CMD                          Prime Database Ltd 
                  3.      *Shri R K Sharma               Deputy Director              Insurance Regulatory and 
                                                                                      Development Authority 
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                  Sl      Name                           Designation                  Organization 
                                                                                      (IRDA) 
                  4.      Dr. S. Subramanian             Head, IBD                    Enam Securities Ltd 
                  5.      Shri Shrawan Jalan             Director                     Ernst & Young 
                  6.      *Shri Sunil Kadam              General Manager              Securities and Exchange 
                                                                                      Board of India (SEBI) 
                          *  Shri  R  K  Sharma,  Deputy  Director,  IRDA  and  Shri  Sunil  Kadam,  General  Manager,  SEBI 
                            replaced Ms Mamta Suri, Joint Director, IRDA and Shri Parag Basu, General Manager, SEBI, 
                            respectively due to internal changes in their respective organizations. 
                             
                      2.2 The group places on record its appreciation for the valuable contribution made by Ms 
                           Lakha Nair, Enam securities Ltd, Shri Sanjay Purao, Deputy General Manager, SEBI 
                           and  Shri E Balasubramanian, Assistant General Manager, SEBI in preparation of this 
                           report. 
                            
                  3.  Scope of the Sub-group: 
                      The following scope of work was identified by the sub-group:  
                              i.    Provisions of SEBI (ICDR) Regulations vis a vis insurance companies 
                             ii.    Disclosures by insurance companies 
                            iii.    Continuous disclosure requirements for insurance companies 
                   
                  4.  Recommendations of Sub-group 
                        4.1. Amendment to SEBI(ICDR) Regulations 
                             The provisions of SEBI (ICDR) Regulations have been examined primarily with regard 
                             to its suitability and sufficiency with respect to disclosures by insurance companies. The 
                             provisions of SEBI (ICDR) were discussed. The sub-group agreed that the provisions of 
                             SEBI (ICDR) Regulations shall be applicable to insurance companies. The sub-group 
                             after  deliberations  gave  their  comments  on  certain  provision  of  the  SEBI  (ICDR) 
                             Regulations along with the recommendations.  
                             The recommendations of the sub-group are as follows:  
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