"The Institute of Actuaries is ready with the guidance note and it would be issued within two months," Chairman J. Hari Narayan told reporters on the sidelines of an insurance conference.

The IRDA is working on rules to calculate the 'embedded value' of an insurance company, or valuation based on the value of the future premiums of policies sold.

Standardised norms have to be in place before a firm goes in for a share sale, he said.

Following issuance of norms insurance companies would be required to show standardised embedded value in the balance sheet for 2009/10, he said.

Right now insurance companies differ on calculation of embedded value, which is one of the requirements for eventual listing of the companies, Narayan said.

The insurance regulator is also in talks with Securities and Exchange Board of India for formulating disclosure norms relevant to insurance companies ahead of any initial public offer float by the firms.

IRDA has already introduced certain disclosure norms like lapse ratio, he said, adding talks with the market regulator would help decide specific disclosure norms for the sector.

Indian laws currently permit foreign firms to hold up to 26 percent in insurance firms.

India currently has 22 life insurance firms, 21 non-life firms and one reinsurer, according to data from IRDA website (www.irdaindia.org).