The IRDAI has issued new guidelines for insurance companies investing in Alternative Investment Funds (AlFs) to improve the monitoring of such investments.
In a circular dated 28 June, the regulator lays out specific requirements for insurers regarding their investments in AlFs. These are:
1.Quarterly Declaration Of Net Asset Values (NAVs)
Insurers have to declare the NAVs of AIFs on a quarterly basis. Regular NAV declaration enhances transparency and allows stakeholders to make informed decisions based on the latest valuations. It also promotes trust and confidence in the insurance industry.
2.Board Approval for Rollover Of AlF Investments
The rollover of investments in AIFs should be approved by the board or investment committee of the insurer.
This requirement emphasises the need for responsible decision-making when extending the tenure of investments in AlFs. It ensures that insurers evaluate the risks, benefits, and market conditions associated with the rollover at the highest management level.
3.Submission of Quarterly Returns
Insurers shall submit quarterly returns on their AlF investments. This requirement enables the regulator to monitor insurers’ exposure to AlFs closely.
