IRDA EXPANDS SCOPE OF INFRASTRUCTURE FOR INVESTMENT

With the Insurance Regulatory Development Authority (IRDA) notifying a new definition for infrastructure, insurance companies now have a wider choice of investments. The new definition of infrastructure covers all telecom services, including basic and cellular, radio paging, domestic satellite services, broadband and internet services, construction of educational institutions, hospitals and projects relating to agro-processing and supply of inputs to agriculture, among others, Insurance firms can also invest in bonds floated by developers of special economic zones (SEZ). The definition is now in sync with that of the Reserve Bank of India and will help policy holders diversify their exposure and earn higher returns. Currently, insurers can invest not less than 10% of their portfolio in infrastructure, subject to exposure norms. “Housing have not been included in the new definition
of infrastructure. Housing will be a separate category and insurance companies can invest in instruments floated by housing financial institutions. The norm stipulates that insurers can invest not less than 5% of their portfolio in the housing sector, subject to exposure norms.”