IRDA not keen to increase equity investment cap for private insurers

The Insurance Regulatory and Development Authority (IRDA) is not keen to increase the equity investment cap for private insurers. At present, the equity investment cap for private insurers is 10%, Radhakrishnan Nair, member (finance & investment) of IRDA, said.

A revision in limit can only be facilitated if there is a change in the Insurance Act, Mr Nair added. Mr Nair was speaking on the sidelines of a Ficci-BOAO Forum for Asia on 27th November.

According to a notification by the finance ministry, Life Insurance Corporation of India (LIC) has been allowed to invest up to 30%.

IRDA plans to introduce risk-based solvency

The Insurance Regulatory and Development Authority (IRDA) is planning to shift insurers to a risk-based solvency model from the current factor-based solvency model, Radhakrishnan Nair, member (finance & investment) at IRDA, said.

Mr Nair was speaking on the sidelines of a Ficci-BOAO Forum for Asia on 27th November.

The model would involve some risk management by the insurer and help maintain a standardised model and appropriate risk-based pricing, Mr Nair added.

IRDA has formed a committee—comprising experts from the sector—headed by an actuary for this purpose. The committee will present a report on both the life and non-life insurance segments to the IRDA chairman by January.

However, there would be no dilution in the regulatory capital requirement. The present solvency margin stands at 150%, Mr Nair said.