IRDA expands definition of ‘infrastructure facility’

Insurance Regulatory and Development Authority (IRDA) has expanded the definition of ‘infrastructure facility’ under its  Registration of Indian Insurance Companies Regulations. In a gazette notification, the insurance regulator passed an  amendment to the regulation wherein the term ‘infrastructure facility’ will be replaced by ‘harmonised master list of  infrastructure sub-sectors’, as specified by the Department of Economic Affairs, Ministry of Finance.

Insurance companies, both life and non-life are mandated to invest a certain percentage in infrastructure. To enable them  in this endeavour, IRDA has specified a list of ‘infrastructure facility’ for insurance firms to invest in.

As per the Section 2 (h) of IRDA Registration of Indian Insurance Companies Regulations, 2000, infrastructure facility includes highway, bridge, airport, port, railways, road transport system, water supply project, irrigation projects, industrial parks, water treatment system and solid waste management system. It also includes sanitation and sewage system, generation, distribution or transmission of power, telecommunication and project for housing.

The gazette notification by the IRDA said that ‘infrastructure facility’ means ‘harmonised master list of infrastructure sub-sectors’. This had been earlier mentioned in a gazette notification by the Department of Economic Affairs, Ministry of Finance in March 2012. The list included master list including master categories like transport, energy, water sanitation, communication, social and commercial infrastructure and various sub-categories within them.

Insurance companies said that this has expanded their investment horizon and will enable them to invest in new categories of infrastructure, since the definition has been expanded.