Hyderabad: The Insurance Regulatory Development Authority (IRDA) has asked Actuarial Society of India (ASI) to recommend a valuation methodology for insurance companies.
"The idea is to universalize the valuation method. Though a time frame is not fixed for the ASI to give the recommendations, they will be mandatory for all insurance companies", IRDA Chairman J Hari Narayan said here today.
'Health insurance premium reduced'
He was speaking to the reporters on the sidelines of graduation ceremony of executive programme in insurance and risk management by Institute of Insurance and Risk Management (IIRM) here.
The valuation methodology would be useful when insurance companies dilute their shareholding through an initial public offering, the IRDA Chief said adding that a realistic valuation of the companies was important as market matures.
LIC has to cut >10% stakes prospectively: Irda
On government favouring the raising of the foreign investment ceiling from 26 per cent to 49 per cent, he said it was a policy matter and was outside the purview of the IRDA.
On the new investment norms capping an insurance company's exposure to a single company to 10 per cent, he said the cap would be prospective. The investment guidelines were not applicable to the earlier investments made by the LIC.
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However, he said it would be advisable for the LIC to reduce its stake to about 10 per cent to avoid concentration of risk.