IFSCA has issued a Consultation Paper dated August 29, 2023 on the proposed IFSCA (Investment by International Financial Service Centre Insurance Office) (Amendment) Regulations, 2023 (Proposed Amendment) and requested general public and stakeholders to share comments/suggestions thereof.
Background – IRDAI (Re-insurance) (Amendment) Regulations, 2023 has been notified on August 22, 2023 wherein Regulation 5(2)(A)(b) 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 FRBs adhering with the Procedure for Re-insurance placement . IFSCA has accordingly, issued the Proposed Amendment in order to align with the Regulation 5(2)(A)(b) of IRDAI (Re-insurance) (Amendment) Regulations, 2023 .
The key provisions as mentioned under Proposed Amendment are as follows:
1. Insertion of a new sub-regulation 9 under Regulation 5 of IFSCA (Investment by International Financial Service Centre Insurance Office) Regulations, 2022 pertaining to Investments by IIO, which states that that Regulation 10, 11, 12 and 13 shall not be applicable to an IIO investing its retained premium in DTA to participate in reinsurance placements as per the IRDAI (Re-insurance) (Amendment) Regulations 2023. However, these IIOs shall continue to follow the mode and manner of investment, as specified in the Regulations .
The extract of the relevant prescriptions has been provided herein below for reference:
Regulation 10: Limits on Exposure in Bonds and other debt instruments rated in accordance with Insurance Capital Standards.
Regulation 11: Limits on the exposures of an IIO to Bonds, Debts and Deposits based on the ratings given in accordance with the ‘Sovereign Credit Rating’ to the countries from where such instruments are offered, by an internationally reputed rating agency.
Regulation 12: Equity exposure matrix, based on the top Investment Grade ratings given by internationally reputed rating agencies to the countries where such instruments are offered and investments m ade.
Regulation 13: Property and Infrastructure Exposure Matrix based on the top Investment Grade ratings given by internationally reputed rating agencies to the countries where such instruments are offered and investments made.
Source category: IRDAI
Attachments
- /2023/253_Proposed_IFSCA_(Investment_by_IIO)_Regulations,_2023.pdf
Comments are closed