IRDAI has issued a Circular on Investment in Infrastructure Debt Funds – NBFC (Circular) bearing reference number: IRDA/F&I/INV/CIR/003/1/2024 dated January 05, 2024, to encourage investments by insurers in the infrastructure sectors and to enhance ease of doing business.
The major highlights of the Circular are as follows:
Insurance laws allow insurers’ to invest in IDFs (Investments in Infrastructure Debt Funds), backed by the Central Government, which will be reckoned as infrastructure investments, on a “case to case approval basis”.
Applying impetus for investment into such sectors by the Insurers, the IRDAI has done away with the requirement of the “case to case approval basis”.
Now Insurers are allowed to make investments in IDF-NBFCs, which would be considered as Infrastructure Investment without any “ case to case approval basis ” and subject to the following conditions:
1. IDF-NBFC is registered with RBI.
2. Residual tenure of Debt Securities shall not be less than 5 years;
3. Minimum Credit Rating of AA or its equivalent by a Credit Rating Agency registered with SEBI for such investments;
4. Exposure norms as per Note 3 of Regulation 9 of IRDAI (investment) Regulation, 2016 shall be applicable.
A copy of the Circular is attached herewith for your ready reference .
Relevant Governing law:
1. Note 2 of Regulation 9 of the IRDAI (Investment) Regulations, 2016
2. Point 1.7 (f)(1) of the Investment Master Circular (version – 03) vide notification number IRDA/F&I/CIR/INV/226/10/2022 dated October 27, 2022
“Investments in Infrastructure Debt Fund (IDF), backed by Central Government as approved by the Authority, on a case-to-case basis shall be reckoned for investments in Infrastructure.”
Source category: IRDAI
Attachments
- /2024/329_Investments_in_Infrastructure_Debt_Funds-NBFC.pdf
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