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Every insurer invests controlled funds, pension business assets, general business assets, and reinsurance assets according to specified percentage thresholds and prudential exposure norms. Insurers submit periodic compliance returns to the Authority within designated time limits. Insurers constitute an investment committee and report extraordinary events that affect the investment portfolio. These regulations come into force on the date of publication in the Official Gazette.
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[भाग III-खण्ड 4] भारत का राजपत्र : असाधारण 17
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
NOTIFICATION
New Delhi, the 14th August, 2000
Insurance Regulatory and Development Authority (Investment) Regulations, 2000
F. No. IRDA/Reg./8/2000.—In exercise of the powers conferred by Sections 27A, 27B, 27D and 114A of the Insurance Act, 1938 (4 of 1938), the Authority in consultation with the Insurance Advisory Committee, hereby makes the following regulations, namely:
(1) Life Business: Without prejudice to Section 27 or Section 27A 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 | Type of Investment | Percentage |
|---|---|---|
| i) | Government Securities | 25%, |
| ii) | Government Securities or other approved securities (including (I) above) | Not less than 50%, |
| iii) | Approved Investments as specified in Schedule I | |
| a) | Infrastructure and Social Sector Explanation: For the purpose of this requirement, Infrastructure and Social Sector shall have the meaning as given in regulation 2(h) of Insurance Regulatory and Development Authority (Registration 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 | Not less than 15% |
| b) | Others to be governed by Exposure/ Prudential Norms specified in Regulation 5 | Not exceeding 20% |
| iv) | Other than in Approved Investments to be governed by Exposure/ Prudential Norms specified in Regulation 5 | Not exceeding 15% |
(2) Pension and General Annuity Business: Every insurer shall invest and at all times keep invested assets of Pension Business, General Annuity Business and Group Business in the following manner:-
| S.No | Type of Investment | Percentage |
|---|---|---|
| i) | Government securities, being not less than | 20% |
| Ii) | Government Securities or other approved securities inclusive of (i) above, being not less than | 40% |
| iii) | Balance to be invested in Approved Investments as specified in Schedule I and to be governed by Exposure/ Prudential Norms specified in Regulation 5 | Not exceeding 60% |
Note: For the purposes of this sub-regulation:
(1) General Business: Without prejudice to Section 27 or Section 27B of the Act, - Every insurer carrying on the business of general insurance shall invest and at all times keep invested his total assets in the manner set out below:
| S.No | Type of Investment | Percentage |
|---|---|---|
| i) | Central Government Securities being not less than | 20% |
| ii) | State Government securities and other Guaranteed securities including (i) above being not less than | 30% |
| iii) | Housing and Loans to State Government for Housing and Fire Fighting equipment, being not less than | 5% |
| iv) | Investments in Approved Investments as specified in Schedule II | |
| a) | Infrastructure and Social Sector Explanation: For the purpose of this requirement, Infrastructure and Social Sector shall have the meaning as given in regulation 2(h) of Insurance Regulatory and Development Authority (Registration 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 | Not less than 10% |
| b) | Others to be governed by Exposure/ Prudential Norms specified in Regulation 5 | Not exceeding 30% |
| v) | Other than in Approved Investments to be governed by Exposure/ Prudential Norms specified in Regulation 5 | Not exceeding 25% |
Note: All investments shall be made in graded securities and the grading shall not be less than of 'very strong' rating by a reputed and independent rating agency (e.g. AA of Standard and Poor).
(2) Reinsurance Business: Every reinsurer carrying on reinsurance business in India shall invest and at all times keep invested his total assets in the same manner as set out in sub-regulation (1), until such time separate regulations in this behalf are made by the Authority.
Without prejudice to anything contained in Sections 27A and 27B of the Act, every insurer shall limit his investments based on the following exposure norms:
A) Exposure Norms
| Type of Investment | Limit for Investee Company | Limit for the entire group to which the investee company belongs | Limit for the industry sector to which the investee company belongs |
|---|---|---|---|
| (a) Equity/ Preference Shares/ Convertible portion of Debentures at face value. (b) Debentures - (face value) including private placed NCD and Non convertible portion of Convertible Debentures. (c) Short/ Medium/ Long Term Loans and any other direct financial assistance. | (i) As on any date Not exceeding 20% of the total capital employed*. | (i) As on any date Not exceeding 15% of the total capital employed* of the group companies. | Not exceeding 15% of the total capital employed* in all such companies. |
| (ii) During the year Not exceeding 5% of estimated annual accretion of funds. | (ii) During the year Not exceeding 10% of estimated annual accretion of funds. |
