The Ministry of Finance stated that the Insurance Regulatory and Development Authority (Irda) had informed that it has carried out a detailed review of the existing Investment Regulation including the requirement to facilitate a higher flow of insurance funds to infrastructure sector.
According to a PIB release, Namo Narian Meena, Minister of State for Finance told Lok Sabha yesterday that exposure of any insurer to an infrastructure company has been increased to 20 per cent as against the present ceiling of 10 per cent as referred in Regulation 5 of the Irda (Investment) Regulations, 2000. The limit can further be increased by another 5 per cent in case of debt with the prior approval of the Board.
He said that Irda had further informed that both equity and debt instruments were considered for classification under Infrastructure for mandatory minimum obligation of 15 per cent as against only debt instruments earlier. Mortgaged Based Securities (MBS) with 'AAA' rating will qualify as 'Approved Investments' and would qualify for infrastructure investments. "Investments in infrastructure are excluded from the applicability of industry sector exposure norms," the PIB release further said.
Further, Irda is seeking public comments on the same and the views of Insurance Advisory Committee (IAC), Life Insurance Council and General Insurance Council were also being sought on the proposed amendments.