Irda finalises investment norms, to notify soon

Insurers would not be allowed to have more than 5% in companies belonging to promoters' groups

The Insurance Regulatory and Development Authority (Irda) is set to put an insurance company’s investment limit for the entire non-promoter group of an investee company at 15 per cent.

A senior official at Irda said it had finalised the norms and these would soon be notified.

He added insurers would not be allowed to have more than five per cent in companies belonging to promoters’ groups. However, the cap on investment in a single company has been retained at 10 per cent.

A NEW CHAPTER

• Irda set to put an insurance company's investment limit for the entire non-promoter group of an investee company at 15%
• Cap on investment in a single company has been retained at 10 per cent
• Irda had proposed an insurance company's exposure to an infrastructure public limited company for equity and debt investments taken together may be increased up to 20 per cent

In a draft proposal last month, the regulator had said that subject to the exposure limits it had mentioned, an insurer shall not have investments of more than five per cent in aggregate of its total investments in all companies belonging to promoters’ groups.

"Investment made in all companies belonging to the promoters’ group shall not be made either by way of private placement (equity) or in unlisted instruments (equity & debt)," it had said. And, that an insurer could not invest more than 15 per cent of investment assets in all companies belonging to the group.

The final norms on investment by life and general insurance companies has already been prepared and officials said these would be notified within the next two weeks.

Irda had proposed that insurance company exposure to an infrastructure public limited company for equity and debt investments taken together may be increased up to 20 per cent.

Also, that total investment in housing and infrastructure should not be less than 15 per cent of the fund for life insurers and five per cent for general insurers.