The Insurance Regulatory & Development Authority (IRDA) has increased the exposure limit of insurers to a single infrastructure company to 20% from the present ceiling of 10%. The aim is to boost the flow of insurance funds for infrastructure financing, reports Hindustan Times.
The limits would be combined for both debt and equity taken together, without sub-ceilings. The 20% limit can be enhanced by an additional 5% with approval of the board of directors. However, such additional investments are to be restricted to debt instruments.
In the case of debt, the duration of investment shall be at least 10 years. Investment should also be made in instruments with a minimum rating of AA by a credit rating agency registered under Securities and Exchange Board of India. In the case of equity, dividend of at least 4%, including bonus, should have been declared for at least the five preceding years.
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