NEW DELHI: Insurance regulator IRDAI has expressed some reservations over Hinduja Group firm IndusInd International Holdings’ (IIHL) resolution plan for debt-ridden Reliance Capital, which is also in the insurance business, including non-life, sources said.
Insurance Regulatory and Development Authority of India (IRDAI) in a recent communication to Nageshwara Rao Y, the administrator of Reliance Capital has said the resolution plan submitted by IIHL is not in line with insurance regulations.
The regulator has sought clarification regarding equity capital that IIHL, the proposed buyer of insolvent Reliance Capital is willing to put in.
It has expressed reservations about debt that IIHL plans to raise to fund the Reliance Capital takeover, sources said.
The sector regulator is of the opinion that promoters should invest their own capital as insurance companies deal with the money of policyholders and as a regulator protection of policyholders is the top priority.
It has also sought clarifications on the structure of the company’s borrowing plans, including the rate of interest, the instruments to be issued and the proposed subscribers etc.
Besides, it has sought the proposed structure for the acquisition of Reliance Capital’s insurance subsidiaries, IIHL’s ability to meet future capital needs of insurance ventures.