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IRDAI Allowed Insurers to Invest in Debt Instruments

Published on April 27, 2021
Current Context: The Insurance Regulatory and Development Authority of India (IRDAI) has allowed insurers to invest in debt securities which are issued by Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs).
IRDAI Allowed Insurers to Invest in Debt Instruments
  • This move will lead to improving the overall yield of the portfolios held by the firms and will provide more long-term funding to the realty sector.
  • This will also allow the insurance companies to perform investments in top-rated infrastructure assets.
  • IRDAI has also defined the categories of investments. The investment will be said to be an ‘approved investment’ if it is made in debt instruments of InvITs and REITs which are rated above AA. Whereas, the investment will be said to be ‘other investment’ if it is made in debt instruments of InvITs and REITs which are rated below AA.
  • As per IRDAI, 75% of the insurers’ investments must be in AAA-rated assets and 25% of investment can be AA or even A- rates. Also, an insurer can invest in below AA- rated instruments only if it is approved by the IRDAI.
  • Static Part: 
    • HQ of IRDAI: Hyderabad
    • Chairman of IRDAI: Subhash Chandra Khuntia

Question: 

Q.1 Which organisation allowed insurers to invest in debt securities that are issued by Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs)?
a. IRDAI

b. RBI
c. PFRDA
d. ESIC

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