IRDA sets out investment pattern for insurance players

New Delhi, August 17: Insurance companies will be allowed to invest 60 per cent of the funds in top rated corporate bonds and shares as pe...

New Delhi, August 17: Insurance companies will be allowed to invest 60 per cent of the funds in top rated corporate bonds and shares as per the guidelines to be notified shortly, IRDA chairman N Rangachary said on Thursday.

He said 40 per cent of the funds would be allowed to be invested in government securities and other approved securities. The government, which has already notified a set of 10 guidelines pertaining to life, non-life, among others, will notify guidelines for accounting and investments today itself, Rangachary said after a seminar organised by FICCI.

The current rules followed by the existing companies were in the pattern of 50:50 (50 per cent of funds for government and approved securities and the remaining for triple A rated bonds).

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He said the norms would make it mandatory for insurance companies to have a separate investment committee to look into the investments by the respective companies. It should be headed by the chief executive officer and have two non-executive directors, chiefs for investment and finance.

In case of life insurance companies, the appointed actuary will also be the member of the committee, he said. The norms for accounting will ask segmented accounting mandatory and auditors in insurance companies have to be selected from a listed approved by the Insurance Regulatory and Development Authority (IRDA).