IFSCA, vide notification bearing reference no. F. No. IFSCA/GN/2024/008 dated October 14, 2024, notified (Investment by IFSC Insurance Office) (Amendment) Regulations, 2024 on October 21, 2024” (“Amendment Regulations”).
The salient features of the Amendment Regulations with respect to general insurance are as follows:
- The IRDAI (Re-insurance) (Amendment) Regulations, 2023 inter-alia enables IFSC Insurance Offices (IIOs), which invest 100% of retained premiums, emanating from insurers in India, in the Domestic Tariff Area (DTA) to participate in Category 2 at par with the Foreign Reinsurance Branches.
- The limits of exposure for investments of unit linked business assets in entities, group and industry at the level of individual segregated fund shall be as under-
Matrix 1A: Investment Assets Exposure Matrix to Equity, Group and Industry for investment of unit linked business assets
| Sr. No. | Overall Exposure by an insurer | Maximum Investment by an insurer as a percentage of the total unit linked business assets |
|---|---|---|
| a) | A Single Entity (Investee) | 10% |
| b) | Within the IIO’s Own Group | 5% |
| c) | To any other single Group | 15% |
| d) | To a particular Industrial Sector | 15% |
Provided that in case of investments in passively managed / index-based Mutual Funds and Exchange Traded Funds (ETFs), exposure norms mentioned at sr. no. (a), (c) and (d) above, shall apply only after – (i) three (3) years from the date of launch of individual segregated unit linked fund; or (ii) the Assets Under Management of an individual segregated unit linked fund becomes equal to or more than twenty-five (25) Million USD, whichever is earlier.”
- In view of the said amendment, IFSC has prescribed separate Investment Asset Exposure limits for such IIOs who would be investing 100% of its retained premiums, emanating from insurers in India, in DTA as per the below table (Matrix 1B) –
Matrix 1B: Investment Asset Exposure Pattern Matrix for certain IIOs
| Sr. No. | Type of Investment Asset | Maximum Exposure Limits (per cent.) |
|---|---|---|
| 1 | Securities of Central Government of India | 10% |
| 2 | Corporate Bonds | 15% |
| 3 | SEBI approved Alternative Investment Funds (AIF) – Category 1 and 2 | 10% |
| 4 | Immovable Property including Real Estate Investment Trusts (REITs) | 5% |
| 5 | Infrastructure including Infrastructure Investment Trusts (InvIT) and instruments for financing Infrastructure Assets | 5% |
| 6 | Money markets instruments for short period | 90% |
| 7 | Investment in ‘Equity’, Preference Shares, Convertible Debentures | 25% |
| 8 | Investment in Debt (incl. Commercial Papers) | 90% |
Note 1: ‘Invested’ would mean ‘Invested and kept invested’
Note 2: Notwithstanding the maximum exposure limits mentioned herein above, the extant limits as specified by the Reserve Bank of India or the Securities and Exchange Board India, as the case may be, shall prevail.”
A copy of the Amendment Regulations is attached herewith for your ready reference.
Source category: IFSC Insurance Office
Comments are closed