CIC cannot hold shares in insurance company: IRDA

India Infoline News Service | Mumbai |

All the investments of the financial companies are transferred to CIC which in turn is held by ultimate promoter company

Currently there is a trend for holding company structure for promoting insurers. It is gaining preference particularly when the promoters are in financial sector activities especially by forming Core Investment Company (CIC).

All the investments of the financial companies are transferred to CIC which in turn is held by ultimate promoter company. Thus, CIC is generally a subsidiary company. However, CIC (being a subsidiary company of the ultimate promoter company) cannot hold shares in Insurance Company as the regulation 2(g) (i) of IRDA (Registration of Indian Insurance Companies) regulation, 2000 provides that company formed under the Companies Act, 1956 which a not subsidiary company as defined in Section 4 of the Act can be an Indian Promoter.

It may be noted that Registration, IPO, M&A and other forms of Capital Committee chaired by CR Muralidharan Ex-Member, has recommended the deletion of said requirement.
 

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