IRDA for 25% investment cap on group cos under ULIP

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Monday , May 05, 2008 at 1442 hrs Insurance regulator IRDA has decided to tighten the exposure norms under the ULIP scheme by imposing a investment ceiling of 25 per cent on group firms.

In addition, the ceiling would also apply to investment in specific sectors.

"For group or sectors there was no limit... we have decided to put a investment ceiling (under ULIP investment scheme) of 25 per cent on it," Insurance Regulatory and Development Authority RDA Chairman C S Rao said.

"Whole thing have been cleared by the board in March...it has to be notified," he said on the sidelines of the seminar on health insurance here, adding the notification is expected to come out any time during the week.

As per the notification, an insurer cannot invest over 25 per cent of the corpus under the ULIP scheme in a group firm.

Similarly, the exposure level in any sector for example IT, banking or automobile, cannot exceed over 25 per cent. As per existing rules companies can invest beyond 25 per cent in the group company or the sector.

Besides, the regulator has also decided to raise the investment exposure in group companies or any particular sector from 10 per cent to 25 per cent.

So, the ceiling would apply to all insurance products ranging from traditional insurance items to unit-linked insurance products, Rao said