IRDAI Eases Norms for Investment in Infrastructure by Insurance Companies

Current Context: The Insurance Regulatory and Development Authority of India (IRDAI) has recently relaxed certain norms on investment in Infrastructure Debt Funds (IDFs) of Non-Banking Financial Companies (NBFCs) by insurance companies on 5th January 2024.

• Previously, insurers were permitted to invest in IDFs backed by the central government on a case-by-case basis.
• The new regulation allows insurers to make investments in IDF-NBFCs which are registered with the Reserve Bank of India (RBI) and have a minimum credit rating of AA or its equivalent by a Credit Rating Agency registered with the Securities and Exchange Board of India (SEBI) to be eligible for the investment.
• This move is aimed at encouraging investments in the infrastructure sector and enhancing the ease of doing business.
• It is also in line with the RBI’s decision to enable IDF-NBFCs to play a greater role in financing the infrastructure sector.

Question:

Q.1 Which organization must register the IDF-NBFCs for them to be eligible for investment by insurance companies?
a. Securities and Exchange Board of India (SEBI)
b. Insurance Regulatory and Development Authority of India (IRDAI)
c. Reserve Bank of India (RBI)
d. Ministry of Finance, Government of India