IRDAI revises investment norms for insurers

Insurance regulator -- Insurance Regulatory and Development Authority of India (IRDAI) has revised norms for insurers and created a separate limit for investment in units of recently created instruments infrastructure investment trusts (InvITs) and real estate investment trusts (REITs). The amendments to investment regulations were made by the IRDAI after it received representations from insurers to relax certain provisions of Investment - Master Circular/ Circulars. Now, separate limits have been created for investment in units of InvITs and REIT.

It said ‘the debt instruments shall be issued by listed InvITs/REITS and rated 'AAA' at the time of investment’. Also, the public holding in the InvIT/REIT should not be less than 30 per cent of the total outstanding units of the InvIT/REIT at the time of investment. Besides other amendments, the regulator has also relaxed norms for investment in perpetual bonds (Additional Tier 1 or AT1). Now, insurers can invest in banks even if it has not paid dividends for the past two years, as was prescribed earlier.

However, the aggregate value of AT1 Bonds held in a bank should not exceed 10 per cent of the total outstanding of such bonds of that particular lender. Amendments have also been made to dividend criteria for classification of equity exchange traded funds (ETFs), mutual funds, and long term bonds for financing of infrastructure and affordable housing.