On 14-10-2024, the International Financial Services Centres Authority (‘IFSCA’) notified the International Financial Services Centres Authority (Investment by International Financial Services Centre Insurance Office) (Amendment) Regulations, 2024. The provisions came into force on 17-10-2024.
Key Points:
-
Regulation 9A relating to “Unit Linked Insurance Products” has been inserted.
-
Every International Financial Services Centre Insurance Office (‘IIO’) should invest and always keep invested its funds of unit linked business as per the pattern of investment subscribed by the policy holders, where the units linked are both marketable and readily realizable.
-
Limits of exposure: Investment Asset Exposure Matrix to Equity, Group and Industry for investment of unit linked business assets:
S. No.
Overall Exposure by an insurer
Maximum Investment by an insurer as a % of the total unit linked business assets
a
A Single Entity (Investee)
10
b
Within the IIO’s Own 5 Group
5
c
To any other single Group
15
d
To a particular Industrial Sector
15
-
In case of investment in passively managed/ index- based Mutual Funds and Exchange Traded Funds, exposure norms a, b and d will apply only after-
-
3 years from the date of launch of individual segregated unit linked fund;
-
Asset Under Management of an individual segregated unit linked fund becomes equal to/ more than 25 Million USD.
-
-
-
Regulation 9B relating to “Admissible pattern of investment” has been inserted which lays down maximum exposure limits for certain types of Investment Asset in which the IIO can invest:
-
Securities of Central Government of India- 10 %
-
Corporate Bonds- 15%
-
SEBI approved Alternative Investment Funds- category 1 and 2- 10%
-
Immovable Property including Real Estate Investment Trusts- 5%
-
Infrastructure including Infrastructure Investment Trusts and instruments for financing Infrastructure Assets- 5%
-
Money markets instruments for short period- 90%
-
Investment in ‘Equity’, Preference Shares, Convertible Debentures- 25%
-
Investment in Debt (incl. Commercial Papers)- 90%
-
