Amendments to Investments Master Circular

IRDAI vide Reference No. IRDAI/F&I/CIR/INV/165/8/2022 dated August 3, 2022 has issued a Circular on “Amendments to Investments Master Circular” (Circular).

Major highlights of the Circular are as follows:

The relaxations are prescribed for categorisation into “Approved Investments” for investments in Equity Exchange traded funds (ETF) by Insurers.

• The changes are prescribed for percentage of investment in Gilt/G Sec/Liquid/Debt/Income Mutual Funds (all taken together) to align the exposure limits applicable to Life Insurers with that of General Insurers.

“Investment Assets” as per Regulation 2(i) of IRDAI (Investment) Regulations, 2016

Percentage to Investment Assets

Less than Rs. 50,000 Crores

10 %

More than Rs. 50,000 Crores and Less than Rs. 2,50,000 Crores

7 %

More than Rs. 250,000 Crores

5%

• Exposure to Long Term Bonds issued by Banks, for financing Infrastructure and Affordable Housing shall not be a part of exposure to BFSI.
• The limit of investment in IPO of Additional Tier 1 (AT1) bonds upto 10% of the issue size has been dispensed with
• The amendments are prescribed in the Circular so as to enable the Insurers to invest in Banks despite non-declaration of dividend has been substituted with profitability track record for preceding financial years.
• To provide separate limits for investments in Units & Debt instruments and higher limits for debt instruments at single Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) additional conditions are prescribed.

Investments in Preference shares and Equity shares can be made part of “Approved Investment” provided the dividend is paid on such shares “for at least 2 years out of 3 consecutive years immediately preceding” instead of “for at least 2 consecutive years immediately preceding”.

Source category: IRDAI

Attachments

• /2022/72_2022-08-03_FW__Amendments_to_Investments_Master_Circular.pdf