IRDA rules out hiking investment limit for insurers

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ENS Economic Bureau: New Delhi, Tuesday, Dec 11, 2012 at 0302 hrs IST

Terming the finance ministry’s plans to hike the investment ceiling for state-owned Life Insurance Corporation to 30 per cent as ‘imprudent’, insurance regulator Irda on Monday called for a more conservative approach and ruled out hiking the cap for private sector insurance firms. “Generally in ....Read more

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FinMin to tighten the noose on big spenders as revenues falter Irda looks at fresh norms for new productsIrda at odds with govt over raising LIC’s investment cap in cos to 30%Irda against FIIs owning 23% in private insurers

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Regulator Asserts

Naren Joshi | Tuesday , 11 Dec '12 17:01:55 PMReply | Forward

The insurance regulator desrves kudos from the insurance community for standing up to the might of the Govt. in opposing its plan to hike the investment ceiling for LIC (and later for all life insurers) to 30% as against the existing norm of 10%.Investment norms used by venture capitaalists can not be used for life insurers as it would adversely affect their ability to meet their long term liabilities. Govt. as owner of LIC at times may be tempted to push this mighty financial institution a little too much to further their short term goals like meeting disinvestments targets.Such temptations must be resisted in order to preserve our financial health.One hears some talk about Governments urging for what is euphomistically called "regulatory forbearance". It will not be in our long term interest to unduly armtwist 'independent'regulators. Too much is at stake for the millions of life policyholders in our country to brook any financial adventurism in the insurance sector.