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IRDA issues new investment guidelines for insurance cos
Insurance regulator Insurance Regulatory and Development Authority (IRDA) has announced fresh investment guidelines that seek to create a level playing field between private players and LIC. The biggest impact of these guidelines will be on LIC.
Insurance Regulatory and Development Authority (IRDA) has announced fresh investment guidelines that seek to create a level playing field between private players and LIC (Life Insurance Corporation). The biggest impact of these guidelines will be on LIC. Earlier LIC was allowed to hold up to 30% of stake in any company but now it may be able hold only up to 10%. It may have to dilute stake in companies where holding is more than 10%. LIC currently holds more than 10% in companies such as Ranbaxy, Mahindra , L&T.
Insurance companies can now invest upto 5% in liquid funds. According to the new insurance rules, companies can now invest in mortgage-backed securities, bonds floated by SEZs and liquid funds. Mutual Fund companies may see upto Rs 52,000 crore coming in from insurance companies for liquid funds.
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