The Insurance Regulatory Development Authority (IRDA) is set to allow insurance companies to invest in a few more financial instruments including derivatives.The proposed move will enhance returns for policy holders.
Currently, insurance companies are allowed to invest in around 58 financial instruments. A broadbasing of the categories of investments to include derivativesis now on the cards. “For policy holders, the move will mean higher yields with better risk management”, said S V Mony, secretary general, Life Insurance Council.
IRDA had proposed delinking the norms governing investment of assets by insurance companies from the main Insurance Act and bringing it under IRDA regulations.
The regulator plans to make a few changes which do not need an amendment to the main Act. One such change includes adding a few more instruments to the investment category known as “other than approved securities, said C S Rao, chairman IRDA
Source: The Economic Times
Monday, July 23, 2007
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