Page 57 - Insurance Times February 2024

Circular

IRDAI Corner

Investments in Infrastructure Debt Funds Submission of Advance Reinsurance
- NBFC Programme

05.01.2024 05.01.2024

1. Reference is drawn to Note 2 of Regulation 9 of IRDAI
(Investment) Regulations 2016 which stipulates that “In- 1. The Authority has issued the IRDAI (Re-Insurance) Regu-
vestment in Infrastructure Debt Fund (IDF), backed by lations, 2018 which deal with the operational aspects
Central Government as approved by the Authority, on a of placement of reinsurance. As per the Regulation 3(A)
case to case basis shall be reckoned for “investments in of the above Regulations an advance reinsurance
infrastructure. Accordingly, the Authority had allowed programme shall be submitted by every insurer in a
insurers’ investments in certain IDFs on case to case basis. specified summary format, to the Authority, at least 45

2. In the recent review of regulatory framework for IDF- days before the commencement of the financial year.
NBFCs, RBI enabled IDFNBFCs to play a greater role in 2. The formats for submission of summary advance rein-
financing of the infrastructure sector.
surance programme by insurers are attached as Annex-
3. To encourage further investments by insurers in the in- ure A for General Insurers (including standalone Health
frastructure sector and to enhance ease of doing busi- Insurers, Reinsurers, FRBs and Exempted Insurers) and
ness, the requirement of case to case approval for an Annexure B for Life Insurers and FRBs respectively.
investment in an IDF is done away with. Insurers are
allowed to make investments in IDF-NBFCs which will 3. Insurers are advised to follow the guidelines outlined in
be reckoned as infrastructure investments, subject to Annexure C while submitting information in the speci-
the following conditions: fied format.
a) IDF-NBFC is registered with RBI. 4. The Board of every insurer shall ensure that the ad-
b) Debt securities shall have residual tenure of not less vance reinsurance programme is submitted to the Au-
than 5 years. thority in the specified format within the stipulated
timeframe as mentioned in the Regulations.
c) Minimum Credit Rating of AA or its equivalent by a
Credit Rating Agency registered with SEBI to be eli- In case of Exempted insurers, if there is no Board / CEO
gible for approved investments. / CFO, then the Authorized Person(s) shall ensure the
d) Exposure norms as per Note 3 of Regulation 9 of submission of advance reinsurance programme in the
IRDAI (investment) Regulations, 2016 shall be ap- specified summary formats.
plicable. 5. Insurers shall submit a confirming the information in
This circular is issued with the approval of Competent Au- the summary Reinsurance programme duly signed by
thority. CEO and CFO as per the attached Annexure D.

The Insurance Times February 2024 51