IRDAI tightens AIF investment norms


Insurance regulator IRDAI has introduced additional guidelines on insurers’ investment in Alternative Investment Funds (AIFs), including one mandating them to report compliance on a quarterly basis.

A circular said the norms would replace a provision, in a 2017 Master Circular on Investment, that stipulates “no investment is permitted in AIFs, which are of fund of funds and leverage funds.”

Thursday’s circular said “no investment is permitted into AIFs which undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted under SEBI (Alternative Investment Funds) Regulations, 2012.”

Insurers are allowed to invest in Fund of Funds (FoFs), which in turn, invest within the country. Further, such FoFs should not invest in AIFs that invest in overseas companies/funds.

The regulator also barred insurers from investing in an AIF that has exposure to a FoF in which the insurer has invested. The insurer, on a quarterly basis, needs to obtain a certificate issued by the concurrent auditor on the compliance of the conditions and file it with quarterly periodical returns, said S. N. Jayasimhan, HoD-Investments.

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