IRDAI Proposes Revised Promoter and Share Transfer Framework for Insurers

The Insurance Regulatory and Development Authority of India (IRDAI) has proposed amendments to the IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024. The proposed changes are intended to align the regulatory framework with the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025.

1. Revision of Promoter Eligibility Criteria

The draft amendments propose changes to the eligibility conditions applicable to:

• Indian promoters; and
• Foreign promoters

of insurance companies.

The objective is to align promoter-related requirements with the amended insurance law framework and facilitate greater regulatory clarity.

2. Changes to Special Purpose Vehicle (SPV) Framework

IRDAI has proposed modifications to the framework governing Special Purpose Vehicles (SPVs) used for holding investments in insurance companies.

The proposed revisions seek to streamline the regulatory treatment of SPVs and align the existing framework with the amended legislative provisions.

3. Rationalisation of Share Transfer Approval Requirements

The consultation paper proposes changes relating to:

• Approval requirements for transfer of shares; and
• Processing fees applicable to share transfer transactions.

The objective is to simplify regulatory procedures and improve efficiency in the processing of share transfer applications.

4. Amalgamation With Non-Insurance Companies

A significant proposal under the draft regulations is the introduction of provisions permitting:

Amalgamation of insurers with non-insurance companies

subject to the applicable regulatory requirements.

This proposal expands the scope of amalgamation transactions beyond the existing framework and seeks to provide greater flexibility for corporate restructuring.

5. Alignment With Insurance Law Reforms

The proposed amendments are intended to give effect to the changes introduced by the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, and to ensure consistency between the statutory framework and subordinate regulations.

6. Objective of the Proposed Amendments

The draft amendments seek to modernise the regulatory framework governing ownership, capital structure and corporate restructuring of insurance companies. By revising promoter eligibility norms, rationalising share transfer requirements, updating the SPV framework, and permitting amalgamations involving non-insurance entities, IRDAI aims to enhance operational flexibility, improve the ease of doing business, and align insurance sector regulations with recent legislative reforms.

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