IRDA (Investment) Regulations, 2000

C INSURANCE REGULATORY AND 01':VELOPMENT AUTHORITY NOTIFlCATlON New Dellu. t.hc 141h August, 2000 Insurance Regulatory and Development Au1bori1y (Investment) Re~'lllation•, 2000 F. No. lRDAfReg./8/2000.-ln exercise of the powers conferred by Sections 27A. 27B. 270 and 114A of the Insurance ACL 1938 (4 of 1938). the Au1honty in consultalion with Lhc lnsurance AdviSOI}' Conuruuce, hereby makes the follo\\ing rcgul;it,ons, namely 1. Short title and commencement (I) These regulations may be called the Insurance Regulatory and Development Authority (Investment) Regulations, 2000. (2) They shall come imo force on the date of their publication in the Official Gazette. 2. Definitions - ln these regulations. unless the context otherwise requires, - a} · Act' means the lnsurance Act, I 938 (4 of 1938). b} 'Accretion of funds" means investment income, gains on sale/ redemption of existing investment and operating surplus. c) • Authority' means the Insurance Regulatory and Development Authority established under sub-section (I} of Section 3 of the Insurance Regulatory and Development Authority Act, 1999 (4 I of 1999). d) · Principal Officer' means any person connected with the management of an insurer or any other person upon whom the Authority has served notice of its intention of treating him as the principal officer thereof. e) All words and expressions used herein and not defined but defined in the Insurance Act, 1938 (4 of 1938). or in the Insurance Regulatory and Development Act, 1999 (41 of 1999), or in any Rules or Regulations made thereunder, shall have the meanings respectively assigned to them in those Acts or Rules or Regulations. 17 ! 18=-========T=HE=G=AZ=E::::T::l'E===:0:::::F::::IN:::ID::::t:::A.::::.:::E:::XTRA.:::::::::::O:::RD=::£:::::N:::::AR::Y:::::=:=====[P=N<=,:::::l::::ll=::S=Ec=. =·II 3. Regulation of Investments (I) Life Business: Without prejudice to Section 27 or Section 27 A of the Act, • Every insurer carrying on the business of life-insurance shall invest and at all times keep invested his controlled fund in the following manner: S.No T~·pe oflovestmcot Percentae:c i) Government Securities 25%. ii) Government So.:curities or other approved securities (including (I) Not less than 50%, above) iii) Aooroved Investments as specified in Schedule I lnfrascructurc and Social Sector ·- a) Not less than 15% Explanation: For the purpose of this requirement. Infrastructure and Soi;ial Sector shall have the meaning as given in regulation 2(h) of Insurance Regulatory and Development Authority (Rei,ristration of Indian Insurance Companies) Regulations, 2000 and as defined in the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural and Social Sector) Regulations, 2000 respectively bJ Others to be governed by F )(po sure/ Prudential Noons specified in Not exceeding 20% Regulation 5 iv) Other than in Approved Investments to be governed by Exposure/ Not t:xceeding 15% Prudential Norms sru•cified in Res?Ulation 5 (2) Pension and General Annuitv Business: Every insurer shall invest and at all tim..:s keep investcJ assets of Pension Business. Gencml Annuity Business and Group Busine~s in the following manner:- S.No T}·oe of lnves1ment i) Government securities. being nnt lcs~ than Ii) G,,wmment Securities or other approved above. being not less than sccuriiies inclusive of (i) iii) BalaJ.Jcc to be invested in Approved Investments as specified 10 Schedule I and to be specified m Resrnlation 5 governed by Exposure/ Prudential Nonns Note: For the purpo~es of this sub-regulation: aJ No unapproved invcstmems shall be made Percenfa!!e 20% 40% Not exc~ed.ing (J(I~ u -- h) All inl'estm.:nts shall he ma<le in graded securittes and the grading shall nol be less 1han of ·very strong· raring by a reputed and independent rating agency (<e.g. AA of Standard and roorl. cl ~.ver: insurer shall invest a~sels in sccunties wJuch arc awvely 1raded in an) Stock Lxchangc in India and which are anributabk to segregated fund~. in respect of linked business. . 0 r C 19 4. Regulation llf Investments (I ) Gen em I Business: Without prejudice to Section 27 or Section 27B of the Act, - Every insurer carrying on the business of general instmmce shall invest and at all times keep invested his total assets in the manner set out b.:low: S.No Tvpe of Investment Pcrccntaee i) Central Government Securities beine not less than 20% ii) State Government securities and other Guaranteed securities including (i) 30% above bcin!!: not less than 1ii) Housing and Loans to State Government for Housing and Fire Fighting 5% equipment, beine not less than iv) investments in Annroved Investments as snecified in Schedule JI a) lnfrastrncrure and Social Sector Not less thru1 Explanation. For the purpose of this requirement, Infrastructure and Social 10% Sector shall have the meaning as given in regulation 2(h) of Insurance Regulatory and Development Authority (Registration oflndian Insurance Companies) Regulations. 2000 and as defined in the Insurance Regulatory and Development Aulhority (Obligations of Insurers to Rural and Social Sector) Rea11la1ions, 2000 respectively ' b) Oth~rs to b..: governed by Exposure/ Prudential Norms specified in Not exceeding Rem •lation 5 30% . v) Oth<:!r than in Approved lnvesuncnts to be governed by ExpQsure/ Pn11kntial Nol cxcecdiJlg Norms soccificd in Regulation 5 25% :ioti: All nwestmems shall be made in graded securities and the grading shall not be less thru1 of 'very strong rating by a reputed and independent r::iting agency (e.g. AA of Standard and Pour). (2) Reinsurnnce Business: every reinsurer carrying on reinsurance business in India shall invest :111d at all times keep invested his total assets in the same manner as set out in sub-regulation ( I). until such time separate regulations in this behalf are made by the Authority I 20 THE GAZEn·E OF INDIA : EXTRAORDINARY S. EXPOSURE/ PRUDENTIAL NORMS Without prejudice to anything contained in Sections 27 A and 278 of the Act, every insurer shall limit his investments based on the fo[]owing exposure nonns: Aj .;;:xµosure Norms Type oflnvestment limit for Investee Limit for the entire Limit for the Company group to which the industry sector to investee company which the investee belongs comnanv belongs (a) Equity/ Preference (i) As on any date (i) As on any date Not exceeding 15% of Shares/ Convertible Not exceeding 20% Not exceeding 15% the total capital portion of Debentures of the total capital of the total capital employed• in all such at face value. employed•. employed• of the companies. (b) Debcntum - (face group companies. value) including private placed NCO and Non convertible portion of Convertible Debentures. (ii) During the year (ii) During the year (c) Shon/ Medium/ Long Not exceeding 5% of Not exceeding I 0% Term Loans and any estimated annual of estimated annual other direct financial accretion of funds. accretion of funds. assi:.tance. • Total capital employed means total cf equity shares, preference sh.ares, debentures, long/ medium/ short term loans (excluding public deposits), free reserves but excluding revaluation reserves, of the investee company as sho"''Il in its last audited balance sheet. B) Exposure Norms for Investment in Public Financial Institutions Equity Share and Preference Shares (at their face Nol exceeding 15% in general of th.e paid up value). equity/ preference capital of the institution or the ex:isting lio!cling % level, ifhi!!her. Investment in Equity Capital, Bonds. Debentures, Not exceeding 10% of the capital employed by an Tenn Loans. institution as per the last audited Balance Sheet. Total Investment vis-a-vis Net Worth of the Not exceeding 60% of Net Worth of the Company. institution. Total Investment in a Financial Year, 7.5% of annual accretions. rota! Investments in all the Financial Institutions. Annual aggregate financial assistance to all Development Financial lnstitutions put together in a single year shaJJ not exceed 20% of the estimated annual accretions for the vear.