IRDA relaxes investment norms

Insurance Regulatory and Development Authority (IRDA) has relaxed the investment norms for the firms like Housing finance and infrastructure finance companies to allow these companies to get higher funding from the insurance companies.

Steps taken by IRDA:

• The investments in debt instruments issued by housing finance companies as specified in the investment regulations shall not be included under the exposure to financial and insurance activities. Currently, such exposure to housing finance companies and infrastructure finance companies is treated as exposure under financial and insurance activities but the industry exposure limits will continue to apply for such investments.
• The single investee debt exposure limits in housing finance companies have been enhanced to 20% of equity plus free reserves from existing 10% limit. The limit mentioned above can be further increased by an additional 5% with the prior approval of board of company.
• The group and promoter group exposure norms will continue to apply on the investments made in a housing finance company.

Month: Current Affairs - August, 2013