The Insurance Regulatory and Development Authority of India (IRDAI) has increased the investment limit by insurance companies to invest in the financial sector to 30% from 25% freeing up more money for investments in stocks and bonds in the sector.
“The authority… permits all insurers to have exposure to financial and insurance activities up to 30 percent of investment assets,” IRDAI said in a circular. The move also comes just before Life Insurance Corp of India’s (LIC) Rs 21,000 crore IPO the largest from India.
Insurance executives welcomed the move saying it will help them diversify their investment basket.
“Weightage of financial & insurance companies in broader Indian market indices has consistently gone up over the last few years. Life insurance industry had been seeking an increase in the current 25% sectoral limit on exposure to the BFSI Sector.