The Insurance Regulatory and Development Authority of India (IRDAI) on January 2023, issued a notification regarding Clarifications on Miscellaneous Matters relating to IRDAI Investments - Master Circular dated October 27, 2023
The following have been clarified namely: -
• Para 1.3 which states “Mutual funds (incl. Exchange Traded Funds - ETFs) “in Para 1.3 clause (c)(6) - "At any point of time, investment in any single Mutual Fund shall not exceed 20% of the total investment in Mutual Funds (all taken together)"
o The clause shall come into operation from April 01, 2023.
o The threshold limit of 20% for each Mutual Fund shall include investments in Exchange Traded Funds (ETFs) also.
• Para 1.5 which states “Investment in Alternative Investment Fund (AIF)” in Para 1.5 clause (3): "Insurers are not permitted to invest in AIFs where rights attached to the units are varied".
o It is clarified that Insurers are not permitted to invest in any scheme of AIFs that have a priority distribution model wherein such AIFs have adopted a distribution waterfall in such a way that may lead to a share of losses more than pro-rata to their holding, compared to other investors belonging to the same class.
[Circular No. IRDAI/F&I/INV/CIR1027101/2023]
