IRDA AMENDS INVESTMENT RULES ON FIXED INCOME PRODUCTS

India’s insurance watchdog has opened the door for Indian insurers to invest in the fixed income market following a recent amendment to the rules on insurers’ investment activity. The Insurance and Regulatory Development Authority (Irda) has widened its ‘approved investment category’ to include fixed income instruments such as mortgage-backed securities in an attempt to help insurers diversify their investment risk, said Irda while adding that insurers will only be able to invest up to 10% of their portfolios on these instruments. “We have taken cognisance of the new instruments in the market and allowed insurance companies to invest in these,” said Irda chairman C S Rao in comments made to the Economic Times . “At the same time we have also built in more prudential requirements such as exposure norms for unit-linked insurance products.”