The recent corporate governance guidelines issued by the regulator state: “IRDA prescribes a minimum lock-in period of five years from the date of commencement of an insurance business for the promoters and no transfer of shares of the promoters would be permitted within this period.”

We spoke to the IRDA Chairman J Harinarayan who said all companies that have commenced operation in the last two-three years have the lock-in clause in their agreement but companies that were formed prior to that were not bound by this clause. For instance, the promoters of DLF Pramerica, which began its operations in 2008, cannot sell their stake until the lock-in period is over.

The regulator also said that no company has approached for any change in ownership yet. Companies that began operations since 2006 include Bharti Axa, Future Generali, IDBI Fortis, Canara HSBC, OBC, Aegon Religare, Star Union Daiichi and DLF Pramerica.

source: MC