‘Insurers can invest in select bonds of AIFIs’

The Insurance Regulatory and Development Authority of India has permitted insurers and reinsurers to invest in Additional Tier 1 Bonds and debt capital instruments and preference share capital instruments, except perpetual cumulative preference shares, forming Tier 2 capital issued by RBI-regulated all India financial institutions.

The move is aimed at widening scope for investments and portfolio diversification and follows RBI allowing AIFIs to issue AT1 Bonds and Tier 2 capital from April 1, 2024 under Prudential Regulations on Basel III Capital Framework, IRDAI said.

Under the existing framework, insurers are allowed to invest in AT1 Bonds and debt capital instruments and preference share capital instruments forming Tier 2 capital of banks, it said in a circular.

Norms for infra SPVs

IRDAI is also considering norms permitting investments in special purpose vehicles in the infrastructure sector whose project has commenced commercial operation and cash flow stabilised, without requirements of parent company guarantee or parent company’s networth and rating.

Insurers with long-term liabilities “may find such assets very useful for both asset-liability management and [to] improve return on investment,” General Manager (F&I) Ammu Venkataramana said in another circular recently inviting comments.

Under the proposed norms insurers will be allowed to invest upto 20% of the debt issued by public limited infrastructure SPV projects conforming to the conditions.

Meanwhile, IRDAI Chairman Ajay Seth has underlined the centrality of grievance redressal to public trust in insurance and cited how timely and effective resolution of grievances is a critical pillar of policyholder protection and an essential element of regulatory oversight.

Choose the customer

“When a citizen takes the trouble to write a grievance, they are not filling a form — they are sending a signal that they need the system to listen. How we respond to that signal shapes trust not only in insurance, but in institutions themselves,” Mr.Seth told a workshop on Centralised Public Grievance Redress and Monitoring System (CPGRAMS) last week in Hyderabad.

“Choose the customer when in doubt. Treat grievances as early warnings and let every resolution strengthen trust — not just close a case,” he said.

The workshop was organised with the Department of Financial Services, government of India, with a focus on strengthening grievance redressal mechanisms in the insurance sector, IRDAI said in a release.