Health Insurance Forum

Insurance firms may get to tap markets through debt sales

by mahir on 06/04/10 at 6:16 am

April 6th, 2010- The tender, if accepted, will permit insurance firms to enlarge quicker without aching abundance or profitability. A Committee with 6 members of India’s insurance regulator, the Insurance Regulatory and Development Authority, has recommended that insurance companies be permitted to elevate capital through issuance of debt paper, told two people familiar with the move. Both of them declined to be named because a final decision has not yet been made.

If approved, the move would bring noteworthy relief to life insurers, who are loaded by huge losses and need raising capital. The Bank for International Settlements (BIS) sets necessities on two classes of capital for banks—tier I and tier II.
Tier I capital is the book value of a bank’s stock plus retained earnings.
Tier II capital is loan-loss reserves plus subordinated debt. Total capital is the sum of both.
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