IRDA (Investment) (Amendment) Regulations, 2002

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,,mr <ifil ~ : ~ INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY NOTIFICATION New Delh.i. the 30th March. 2002 Insurance Regulatory and Development Authority (Investment) (Amendment) Regulations, 2002 F.No. IRDA/Reg./03/2002.-1 n exercise of the powers conferred by sections 27 A. 27B. 27D and 114A of the J nsurance Act J 938 (4 of 1938). tltc Authority. in consultation wilh the Insurance Advisory Committee, hereby makes the following regulations to amend the Insurance Regulatory and Development Authorit)' (Investment) Regulations. 2000. ncmely .- ( 1) These regulations may be called the Ins~ce Regulatory and Development Authority (Investment) (Amendment) Regulanons, 2002. (2) They shall come into force on the date of their publication m the Official Gazette. 2 Note 7 after Regulation 4 which is applicable to both Regulaoon 3 and Regulation 4 of the Insurance Regulatory and Development Authonty (Investment) (Amendment) Regulations, 2001 is being substituted.by tht: following. - 7. "Investments m equity shares listed on a registered stock exchange should be made in actively traded and liquid instruments viz. equity shares other than those classified as Uunly traded as per gu1dehnes govenung Mutual Funds issue<l by SEBI from time to lime." 3 Regulation 5 shall be amended to read as follows. " 5. EXPOSURE/ PRUDENTIAL NORMS Without pre1udtce to anythmg contamed in sections 27 A and 27B of the Act, every insurer shall limit his investments based on lhe following exposure norms: Type of lnvestmen1 (a) All investments in Equity I Preference Sbares of the Company (b )Debentures (Convertible / partly convertible/non-conv ertible) (c) Short/ Medium/ Long term loans (d) Any other permitted investments as per lhe Act/Regulation Notes Limit for Investee Company In the case of Indian insurance Comparues: Exposure at any point of time not to exceed 10% of the subscribed share capital, free reserves and debentures/ bonds of the investee company or the I 0% of the Insurer's total assets in case of non-life insurers and I 0% of the Controlled funds in case of Life insurers, whichever 1s less. limit for the entire group lo which the Investee Company belongs Exposure at any point of time not lo exceed l 0% of the aggregate subscribed share capital. free reserves and debentures of all the group companies in which investments including investments under considerations, have been or proposed to be made by the insurer or the I 0% of the total assets in case of Non-Life Insurers and I 0% of the Controlled Funds in case of Life Insurers whichever is less. Limit for the Industry Sector to which the Investee Company belongs Investment by the insurer in any industrial sector would not exceed I 0% of its tolal investment exposure to the industrial sector as a whole. (Classification of industrial sector to be done on the lines of classification in Industries done· by CMIE (Centre for Monitoring Indian Economy) I. Subject to exposure limtts as per Insurance Act, 1938, investment in equity including preference shares, investment in equity converttble part of debentures should not exceed 50% of the above exposure norms as mentioned m the table. A similar 50% of exposure norms limit would also apply to investment in immovable property. 2. Subject to exposure limits mentioned in the table above, an Insurer shall not have investments of more than 5% m aggregate of its Controlled funds in the case of a life insurer or 5% in aggregate of its assets in the case 3 4 THE GAZETTE OF INDIA: EXTRAORDINARY (PART IIT-SEC. 4] of non-life insurer in the companies belonging to the promoters' groups. For the purposes of this regulation ''group" will have the same meaning as i,o the MRTP Act, 1969. All investments in this category would specifically be referred to the Authority. 3. The percentage of 10% of the total assets in the case of Non-Life insurers and 10% of the Controlled Fund in case of Life insurers can be raised to 15% in each case subject to specific approval of IRDA." 4. In the case of existing insurers: The limits mentioned above as applicable to the Indian Insurance Companies, shall stand modified as under:- a) exposure at any point of time not to exceed 20% of the subscribed share capital, free reserves and debentures/ bonds of the investee company or 5% of the Controlled funds' of the life insurer or I 0% of the general insurers total assets. b) The limit prescribed in respect of exposure to the industrial sector shall stand increased to 20% in the case of investments in Financial Institutions. N. RANGACHARY. Chairman [No. ADVT-IlJ/IV/Exty./61/02] Printed by the Manager. Govt. of India Press, Ring Road. Mayapuri, New Delhi-I 10064 and Published by the Controller of Publications, Delhi-l l 0054.