Irdai tightens ESOP norms, share transfer rules for insurers
Irdai has implemented stricter rules regarding employee stock option plans for insurance companies to regulate ownership stakes. Senior executives and directors must seek approval to exceed prescribed shareholding limits under these plans. Insurers are required to monitor direct and indirect share allotments to prevent regulatory breaches.
Mumbai: Insurance Regulatory and Development Authority of India (Irdai) has tightened rules governing shares issued to employees of insurance companies under employee stock option plans (ESOPs), stating that senior executives and directors cannot use such schemes to acquire stakes beyond prescribed limits without prior regulatory approval.In a circular issued on Monday, Irdai asked insurers to track not only direct share allotments to employees but also shares issued through ESOP trusts to ensure regulatory ownership limits aren't breached.Where an investor holding 5% or less is likely to cross the 5% threshold after a transfer, prior approval is required.
