Irda allows higher flow of insurance funds to infra sector

Last Updated: Sat, Dec 08, 2012 18:57 hrs

pIn a move to facilitate greater flow of funds to the infrastructure sector insurance firms have now been allowed to take their exposure to 20 per cent of their total funds in the infrastructure sector as compared to 10 per cent earlierppThe Insurance Regulatory and Development Authority Irda also said both equity and debt instruments were considered for classification under infrastructure for mandatory minimum obligation of 15 per cent as against only debt instruments earlier Mortgaged Based Securities MBS with &lsquoAAA&rsquo rating will qualify as &lsquoapproved investments&rsquo and would qualify for infrastructure investmentsppIn a press statement issued by the PIB Namo Narian Meena minister of state for finance told Lok Sabha that exposure of any insurer to an infrastructure company has been increased to 20 per cent as against the present ceiling of 10 per cent as referred in Regulation 5 of the Irda Investment Regulations 2000ppAs per a recent exposure draft on investments by Irda the limit can further be increased by five per cent in case of debt with the prior approval of the BoardppInsurers are of the view that this would be a major boost to their portfolio &ldquoThe ceiling being increased to 20 per cent will enable us to allocate more funds from our portfolio towards institutions in the infrastructure sector Some of them are performing well in the segment which will help us get good returns and will boost the economy on an overall basis since infrastructure is a core sector&rdquo said the chief investment officer of a private life insurance companyp

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