Irda tightens norms for insurers

The Irda has made key changes to the investment norms for insurance companies, and sought to remove the differential treatment for provisions between private and public sector insurers in their exposure norms, seeking to limit insurers' exposure to companies to 10% stake.

Written by Banking Bureau

August 25, 2008 01:27 IST

The Insurance Regulatory Development Authority (Irda) has made key changes to the investment norms for insurance companies, and sought to remove the differential treatment for provisions between private and public sector insurers in their exposure norms, seeking to limit insurers’ exposure to companies to 10% stake.

Irda has also made the norms applicable to unit-linked insurance plans and for insurance companies applying for initial public offers of companies.

In a circular, Irda has said insurers can invest 10% of outstanding shares (face value) or 10% of fund size, which ever is lower, in equity shares of an investee company.

A sum of 10% of subscribed share capital, free reserves and debentures/ bonds of investee company or 10% of fund size, whichever is lower, can be invested in debt instruments of investee company.

This article was first uploaded on August twenty-five, twenty eight, at twenty-seven minutes past one in the night.