Insurance regulator IRDAI has issued a new master circular for insurance companies. The approval fee for share transfer of large stake has been reduced from Rs 50 lakh to Rs 10 lakh. Rules regarding IPO, ESOP and merger have also been clarified.
Business News: Insurance regulator IRDAI has taken a big decision for the insurance companies of the country. Now getting approval for share transfer of large stake in companies will be cheaper than before. The Insurance Regulatory and Development Authority of India (IRDAI) has reduced the maximum fee for this process from Rs 50 lakh to Rs 10 lakh. Apart from this, rules related to listing in the stock market, giving shares to employees and mutual merger of insurance companies have also been clarified.
Now Rs 10 lakh will be charged for approving share transfer
IRDAI issued a new master circular on Monday, November 2, 2026. Many provisions related to registration, shareholding, capital raising and merger of insurance companies have been included in it. The biggest change has been in the approval fees for share transfer. Earlier, a processing fee of Rs 50 lakh was charged for approval to transfer more than 50 per cent stake in the paid-up equity capital of an insurance company. Now it has been reduced to Rs 10 lakh.
In this way companies will save Rs 40 lakh on one application. However, this reduction has been made in the special fees applicable on transfer of large stake. The fees prescribed for other ordinary share transfer applications are different. The regulator has also made it clear that fees deposited before the implementation of the new rules will not be refunded. At the same time, some No Objection Certificate (NOC) applications already submitted under the old rules will be exempted from the new processing fee.
Companies bringing IPO will have to give complete information
IRDAI has also set necessary conditions for insurance companies preparing to enter the stock market. Now, before launching an IPO, a company will have to inform the regulator about its existing shareholding and any changes that occur after listing. Details of investors who hold more than one per cent of the paid-up equity of the company will have to be given separately. The company will also have to tell why it is bringing the IPO and how much money it plans to raise from it.
If new shares will be issued in the IPO or old investors will sell their stake, then information about both will have to be given separately. Apart from this, the managing director or CEO of the company will have to give a written declaration that the information given in the documents related to the IPO is correct and the necessary legal rules have been followed. This will also include assurance of protection of the interests of the policyholders.
Approval will be required for purchasing more shares through ESOP
Insurance companies give their employees the opportunity to buy shares through ESOP i.e. Employee Stock Option Plan. Its purpose is to link the employees with the company’s stake. In the new circular, monitoring of this process has also been increased. If directors or senior officers of the company want to acquire more shares than the prescribed limit through ESOP, they will first have to obtain approval from IRDAI.
This rule will also be applicable in cases where a separate trust has been created to give shares to employees. Insurance companies already listed in the stock market will also have to keep an eye on the changes in shareholding. For this, necessary arrangements will have to be made with the stock exchange and depository.
Monitoring will also increase in merger of insurance companies
IRDAI has also made necessary provisions in the rules related to merger and transfer of business of two insurance companies. Now companies planning a merger will have to provide their financial position and documents related to the proposed deal. Along with this, the report of an independent actuary will also be necessary. An actuary is a specialist in assessing the financial risks and liabilities associated with an insurance business.
Its report will explain what impact the merger will have on the company’s financial position, pricing of insurance products and its ability to pay claims in the future. The expert preparing the report should not be professionally associated with any company involved in the merger in the last five years.