Insurance companies asked to make provisions for IL&FS, RCap defaults

Some insurers have already made adequate provisions for all non-standard accounts of IL&FS, says IRDAI.

Insurance companies, like banks, will have to provision for their exposure to the cash-strapped IL&FS group and the two downgraded Reliance Capital subsidiaries, said the sector's regulator Friday.

The Insurance Regulatory and Development Authority (IRDAI) said insurers with exposure to Reliance Home Finance and Reliance Commercial Finance will have to make provisions for debt of these companies downgraded by Care Ratings last month.

The the National Company Law Appellate Tribunal (NCLAT) allowed Thursday banks to declare their defaulting accounts of IL&FS (Infrastructure Leasing & Financial Services) and its group companies as NPAs.

The Reserve Bank asked banks last month to disclosure