Ulip investment in group firms capped at 25%

In addition, the ceiling would also apply to investment in specific sectors.

"For group or sectors there was no limit.... We have decided to put an investment ceiling (under the Ulip investment scheme) of 25 per cent on it," said Irda Chairman C S Rao.

"The whole thing has been cleared by the board in March. It has to be notified," he said on the sidelines of a seminar on health insurance here, adding the notification is expected to come out any time during the week.

 

According to the notification, an insurer cannot invest over 25 per cent of the corpus under the Ulip scheme in a group firm.

Similarly, the exposure level in any sector, for example IT, banking or automobile, cannot exceed over 25 per cent.

According to the existing rules, companies can invest beyond 25 per cent in a group company or a sector.

Besides, the regulator has also decided to raise the investment exposure to group companies or any particular sector from 10 per cent to 25 per cent.

So the ceiling would apply to all insurance products ranging from traditional insurance items to Ulips, Rao said.

The exposure to shares of a single investee firm would, however, continue to be capped at 10 per cent, he added.