The Insurance Regulatory and Development Authority (Irda) today raised the exposure an insurance company can take in the equity of companies.

The regulator said depending upon the size of their controlled fund, insurers can pick up 12 percent and 15 percent stake in a company. The cap was earlier set at 10 percent.

“The Authority believes that this is commensurate and appropriate given the size of funds under consideration without adversely affecting the prudential management of investments,” the Irda said in a circular posted on its website after a board meeting today.

The government had earlier allowed the Life Insurance Corporation of India to buy up to 30 percent stake in a company.

It is believed that the move was aimed at helping the disinvestment programme of the government.

As per the press release, “The Authority has also approved the regulations which would strengthen the Indian Institute of Insurance Surveyors and Loss Assessors.”

The statement also said that for sale of life insurance a standard proposal form is required. And, it will be compulsory for all life insurance products sold in India after six months from the date of publication of these regulations in the official gazette to have this standard proposal form. 

The move comes in place to capture full details of the policy holder in accordance with the Know Your Customer norms, which Irda thinks will minimise the instances of mis-selling.