Investment Master Circular October 2022

REF: IRDA/F&I/CIR/INV/226/10/2022 OCTOBER 27, 2022
INVESTMENTS - MASTER CIRCULAR

IRDAI (INVESTMENT) REGULATIONS, 2016
Version - 03
October , 2022
The Authority, to enforce IRDAI (Investment) Regulations, had issued various Circulars and Guidelines at different
times. This Master Circular covers all Circulars, Guidelines which are effective to date, to serve as one stand point
reference. While due care had been taken to prepare this Master Circular, users may point out inconsistencies,
through Life Insurance Council or General Insurance Council, which will be addressed in subsequent versions
INDEX
1. INVESTMENT CATEGORIES
1.1 Equity
a. Investment in Equity Shares through IPO
b. Limit for Investment in IPO
c. Securities Lending and Borrowing (SLB) framework
1.2 Repo, Reverse Repo in Government Securities and Corporate Debt Securities
1.3 Mutual funds (incl. Exchange Traded Funds - ETFs)
a. Investment in Equity Exchange Traded Funds
b. Investment in GILT Exchange Traded Funds (GILT-ETF)
c. Investment in Mutual Fund
d. Investment in Debt ETFs with CPSE Bonds as underlying
1.4 Investment in Asset backed securities, PTCs and SRs
1.5 Investment in Alternative Investment Fund (AIF)
1.6 Debt Securities issued by Banks
a. Investment in Perpetual Debt Instruments of Bank’s Tier-I Capital and Debt instruments of Upper Tier-II
capital
b. Bank’s Capital Instruments under Basel III – Investment by Insurance Companies
c. Long term Bonds by Banks – Financing of Infrastructure and Affordable Housing
d. Investment in “Additional Tier 1 (Basel III Compliant) Perpetual Bonds” [AT1 Bonds]
1.7 Other specific Bonds / Non-Convertible Debentures (NCDs)
a. Investment 8.15% GIO FCI Special Bonds, 2002 & 8.03% GOI FCI Special Bonds, 2024
b. Investment in Oil Companies GOI Special Bonds
c. Investment in IIFCL Taxable Bonds – Approved Securities
d. Investment in IIFCL Tax-Free Bonds – Approved Securities
e. Investment in Indian Depository Receipts (IDR)
f. Investment in Infrastructure Debt Fund – NBFC
g. Investment in Infrastructure Debt Fund – Mutual Fund
h. Investment in M/s L&T Infra Debt Fund – NBFC
i. Investment in Onshore Rupee Bonds issued by Asian Development Bank (ADB) and International Finance
Corporation (IFC)
j. Investment in M/s India Infradebt Limited IDF– NBFC
k. Investments in IDFC Infra Debt Fund Limited - NCD
1.8 Derivatives
a. Exposure to Interest Rate Derivatives
b. Exposure to Credit Default Swaps
1.9 Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (InvIT)
a. Investment in Units of “Real Estate Investment Trusts (REIT) & Infrastructure Investment Trusts (InvIT)”
Investment – Master Circular Page 2 of 100

b. Investment in Debt Securities of “Real Estate Investment Trusts (REIT) & Infrastructure Investment
Trusts (InvIT)”
1.10 Credit Rating- Applicable for Infrastructure Investments
1.11 Dividend Criteria for Equity Investment under “Approved Investment”
1.12 Exposure of Insurers to Banking, Financial and Insurance (BFSI) Activities
2. RISK MANAGEMENT AND CONCURRENT AUDIT
2.1 Investment Risk Management Systems and Process

a) General
b) Front Office
c) Mid Office
d) Back Office
2.2 Audit of Investment Risk Management Systems & Process, Internal / Concurrent Audit
a. Audit of “Investment Risk Management Systems and Process”
b. Internal / Concurrent Audit of Transactions
c. Appointment of Audit Firms for “Investment Risk Management Systems & Process”
d. Appointment of Audit Firm for Internal / Concurrent Audit of Transactions
e. Information of Audit Firm for Internal / Concurrent Audit to be filed with IRDAI
2.4 Investment in Equity Exchange Traded Funds
2.5 Exposure to Credit Default Swaps
2.6 Exposure to Interest Rate Derivatives
2.7 Investment in “Additional Tier 1 (Basel III Compliant) Perpetual Bonds” [AT1 Bonds]
2.8 Investment in Debt Securities of “Real Estate Investment Trusts (REIT) & Infrastructure Investment Trusts
(InvIT)”
2.9 Control & Monitoring Mechanism of Investment Operations – Work from Remote Location
3. VALUATION GUIDELINES
3.1 Investment in Equity Exchange Traded Funds

3.2 Securities Lending and Borrowing (SLB) Framework
3.3 Investment in Mutual fund
3.4 Investment in Perpetual Debt Instruments of Bank’s Tier-I Capital and Debt Capital Instruments of upper Tier-II
Capital
3.5 Investment in Onshore Rupee Bonds issued by Asian Development Bank (ADB) and International Finance
Corporation (IFC)
3.6 Exposure to Interest Rate Derivatives
3.7 Income Recognition, Asset Classification, Provisioning and Other related matters
a) Asset Classifications

b) Provisioning for Loans and Advances
c) COVID-19 – Rescheduling of Term Loans
3.8 Insurers Board to decide Primary / Secondary Exchange for valuation of Securities
4. OPERATIONAL PROCEDURE
4.2 Securities Lending and Borrowing Framework
4.3 Investment in Equity Shares through IPO
4.4 Investment in Mutual Fund
4.5 Investment in Alternative Investment Fund
4.6 Exposure to Credit Default Swaps (CDS)
4.7 Outsourcing of Investment Function
4.8 Transfer of Investment
4.9 Other Investments in Pension and Group Fund
4.10 Transactions on Stock Markets to be on Cash Basis
4.11 Negotiated Dealing System – Order Matching (NDS – OM)
4.12 Reporting of OTC transactions in Certificates of Deposits (CDs) and Commercial Papers (CPs)
4.13 Issue of Long Term Bonds by Banks – Financing of Infrastructure and Affordable Housing
4.14 Reporting of transactions in Corporate Bonds, Commercial Papers, Certificate of Deposits & Securitised Debt
4.15 ULIP Fund Clearance procedure and NAV Process
a. IRDAI ULIP Fund Clearance Procedure
b. NAV Process
4.16 Implementing RFQ Platform for Investments in Corporate Bonds / Commercial Papers
4.17 Control & Monitoring Mechanism of Investment Operations – Work from Remote Location
5. DISCLOSURES AND REPORTING NORMS
5.2 Securities Lending and Borrowing Framework
5.3 Investment in Credit Default Swaps
5.4 Exposure to Interest Rate derivatives
5.5 Issue of long term bonds by banks – Financing of Infrastructure and affordable housing
5.6 ULIP Periodical Disclosure
5.7 Exposure to Companies participating in Joint Lenders Forum (JLF)
6. FUND CLEARANCE FORMATS & INVESTMENT CATEGORY CODES
6.1 Asset Categories Sheet

a. For Existing Segregated Funds – FORMAT 1

b. For New Segregated Funds – FORMAT 2
6.2 Fund Clearance Declaration – FORMAT 3
6.3 Exhaustive Asset Categories as per IRDAI (Investment) Regulations, 2016
a. Exhaustive List of Category Codes - Annexure – 1
b. Valuation Methodology for Investment Categories - Annexure – 2
7. LIST OF CIRCULARS COVERED
8. LIST OF CIRCULARS DISCONTINUED

1. INVESTMENT CATEGORIES
1.1 EQUITY
a. Investment in Equity Shares through IPO1
Equity shares offered through IPO, including Offer for Sale, which satisfy all the following criteria, shall be part of
“Approved Investments”
1. Equity Shares are being “listed” through IPO

2. The Board of the insurer shall lay down the criteria to be considered before investing in IPOs.
3. Performance track record of the company including Earnings and Dividend record, Dividend Criteria is satisfied
for at least two past years as “unlisted” company as IRDAI (Investment) Regulations, in the case of Investee
Companies, formed out of ‘de-merger’ of a parent company, issuing shares through IPO, the performance track
record would apply with reference to the parent company
4. The Investment in Equity Shares should comply with prudential and exposure norms as prescribed and in
particular, Note 7 to Regulation 4 to 8 of IRDAI (Investment) Regulations, 2016 i.e., “actively traded” and “liquid
instrument” conditions should be satisfied within 3 months from the date of listing
5. Any investment made in IPOs, which do not satisfy the above conditions, shall fall under ‘Other Investments’
b. Limit for Investment in IPO
The maximum bid amount (and not Margin Money) to be invested in IPO shall be the least of the following:
1. 10% of Subscribed Capital (Face Value) of the Investee Company (including the proposed Equity issue through
IPO); or
2. 10% of the ‘Fund’ (Fund shall refer to all Investments under management taken together) of a Life Insurance
Company or 10% of the Investment Assets of a General Insurance Company, as the case may be.
c. Securities Lending and Borrowing (SLB) framework2
Insurers are permitted to participate in Securities Lending and Borrowing (SLB) scheme subject to the following
1. The SLB Framework should be governed by the SEBI Cir no. MRD/DoP/SE/Dep/Cir – 14/2007 Dt. 20th Dec,
2007 as amended from time to time. Insurers are permitted to lend through SLB Framework in Equities ONLY
2. The Insurer has to adhere to the Client level and Participant level position limits prescribed by SEBI and stock
exchange while undertaking SLB. Insurer can only lend securities to the extent of not more than 10% quantity of
those “scrips” of that particular fund(s). These prescribed limits shall be adhered at the time of lending
1IRDA /CIR/INV/020/2008-09 Dt. 22nd Aug 2008
2IRDA/F&I/CIR/INV/134/2013 Dt. 12th July 2013

3. Securities lent in SLB would not be treated as creating encumbrance, charge, hypothecation or lien on such
securities
1.2 REPO, REVERSE REPO IN GOVERNMENT SECURITIES AND CORPORATE DEBT SECURITIES
Insurers can undertake Repo/Reverse Repo transactions in Government Securities and Corporate Debt Securities
subject to the provisions of Insurance Act, 1938 and the following conditions:
1. In case of Life Insurers, the exposure to reverse repo transactions in Corporate Debt Securities at any point of
time shall not exceed 10% of all funds taken together. Further, at individual Segregated Fund level [SFIN], the
exposure should not exceed 10% of such fund size [SFIN]. Life Insurers cannot participate in repo transactions.
2. In case of Non-Life Insurers, the exposure to Reverse Repo and Repo transactions in both Government
Securities as well as Corporate Bond Securities (taken together) shall not exceed 10% of Investment Assets of
the Insurer.
3. Reverse Repo transaction in Govt. Securities will be treated at par with CBLO transactions and the 10%
Investment limit, mentioned in points 1 and 2 above, shall not apply to Reverse Repo transaction in Govt.
Securities.
4. The underlying corporate debt security in case of Reverse Repo shall be listed and shall have a rating of not
less than AA or equivalent.
5. The tenor of Repo transactions shall not exceed a period of six months. While entering into such repo
transaction, prior approval of the Investment Committee is mandatory.
6. No Reverse Repo/Repo transactions in Corporate Debt Securities shall be made between the Insurer and
entities belonging to its promoter group.
7. The Securities held as collateral in a Reverse Repo, shall not form part of exposure calculations under
Regulation 9 of IRDAI (Investment) Regulation, 2016. In Reverse Repo transaction, the exposure shall be on the
counterparty.
8. At any point of time these transactions shall be in compliance with Regulation 4, 5, 6, 7 and 8 of the IRDAI
(Investment) Regulation, 2016 as amended from time to time and comply with other Guidelines, Circulars issued
there under.
1.3 MUTUAL FUNDS (INCL. EXCHANGE TRADED FUNDS - ETFs)
a. Investment in Equity Exchange Traded Funds3
Insurers can invest in Equity ETFs, as a part of Mutual Fund exposure, subject to the following conditions:
3IRDA/F&I/CIR/INV/074/03/2014 Dt. 03rd Mar, 2014

1. Only passively managed schemes of the Mutual Funds which are registered with SEBI and governed by SEBI
(Mutual Funds) Regulations, 1996, as amended from time to time are eligible. These schemes should be
benchmarked and be tracked based on a publicly available Index
2. The total expense ratio shall not exceed 0.50%
3. At least 85% securities in the equity basket shall be compliant with respect to dividend distribution norms as per
Regulation 3 (A)(5) of IRDAI (Investment) ,2016 to qualify as a part of “Approved Investment”.4
4. Insurers are required to ensure compliance with the provisions of Sec. 27E of the Insurance Act, 1938 and shall
invest only in ETFs which invest in domestic equities
5. These instruments shall be listed on at least one Stock Exchange which has nationwide connectivity terminals
6. In case, the dividend criteria mentioned under point no. 3 is not met by the ETF, such investment shall be
automatically re-classified as ‘Other Investment’ category
7. These Investments shall be governed by the exposure norms applicable for Investment in Mutual Funds by
Insurers
8. Exposure to stocks through ETF shall not be reckoned for the overall exposure norms prescribed for Individual
stocks vide Regulation 9 of IRDAI(Investment) Regulations, 2016 as amended from time to time
b. Investment in GILT Exchange Traded Funds (GILT-ETF) 5
Insurers can invest GILT-ETFs as part of “Approved Investments” which fulfil all the conditions prescribed for
investment in Mutual Funds under Gilt/G Sec./Liquid categories and as a part of Mutual Fund exposure
1. The GILT-ETFs shall be issued and managed by the Mutual Funds registered under SEBI (Mutual Funds)
Regulations, 1996, as amended from time to time
2. The object of the GILT-ETFs shall be to invest in a basket of Govt. Securities Actively Traded in the market or
constituents of a publicly available index
3. The minimum investment by the Insurer shall not be less than Creation Unit Size and shall not be reduced, at
any time below Creation Unit Size and value of Creation Unit Size. Such investment at the time of investment,
shall not be more than Rs.50 lakhs
4. The Overall Expense Ratio shall not exceed 0.50%
5. Insurers are required to ensure compliance with the provisions of Sec. 27E of the Insurance Act, 1938 and shall
ensure that the GILT-ETFs invest only in Domestic Govt. Securities
6. The GILT-ETFs shall be treated at par with GILT/G-SEC Mutual funds and shall adhere to exposure norms
applicable to “Investment in Mutual Funds (MFs) by Insurers”.
4 IRDAI/F&I/CIR/INV/165/8/2022 Dt.03rd Aug, 2022

5IRDA/F&I/CIR/INV/156/08/2015 Dt. 28th Aug, 2015

c. Investment in Mutual Funds6
1. Investment in Gilt, G Sec and Liquid Mutual Funds would form part of ‘Approved Investments’ under IRDAI
(Investment) Regulations, 2016 as per guidelines listed below. Hence any Investment made in Debt and Income
Mutual Funds, including those which partly invest in Government Securities and Money Market instruments, will
fall under ‘Other Investments’, which in turn shall be subject to the limits prescribed in the guidelines issued
under IRDAI (Investment) Regulations, 2016, as amended from time to time, along with the norms mentioned
below.
2. The investment shall be restricted to schemes of Mutual Funds comprising of Liquid Funds, Gilt, G Sec or Debt
and the same shall be governed by the following norms:
a) The Mutual Fund should be registered with SEBI and be governed by SEBI (Mutual Funds) Regulations,
1996
b) Gilt / G Sec / Liquid MFs shall have the same meaning as under SEBI Regulations
c) The insurer shall, as a part of Investment Policy, cover the required diversification among various Mutual
Funds to minimize risk
3. Where, the schemes of mutual funds in which investment is made, is managed by an Investment Manager who
is under the direct or indirect management or control of the Insurer or its promoter, the same shall not exceed, in
the case of Life Insurer, 3% of Life Fund, Pension, Annuity & Group Funds and 5% of Unit Linked Fund and in
the case of General Insurers, not more than 5% of Investment Assets
4. The investment in Gilt / G Sec / Liquid /Debt/ Income Mutual Funds (all taken together) at any point of time, shall
be as under:
“Investment Assets” as per Regulation 2(i) of IRDAI

Percentage to Investment Assets
(Investment) Regulations, 2016
Less than Rs.50,000 Cr 10%
More than Rs.50000 Crores and Less than Rs.250000 Crores 7%
More than Rs.250000 Crores 5% 7
5. The above limits in the case of Life Insures, will apply to the overall level and at SFIN Level, the maximum
exposure shall not exceed 15%.
6. At any point of time, investment in any single Mutual Fund shall not exceed 20% of the total investments in
Mutual Funds (all taken together).
6IRDA/CIR/INV/020/2008-09 Dt 22nd Aug 2008

7 IRDAI/F&I/CIR/INV165/8/2022 Dt.3rd August, 2022

d. Investment in Debt ETFs with CPSE Bonds as underlying8
Debt ETFs with underlying Debt Securities of Central Public Sector Enterprises (CPSEs) [herein after referred to as
Debt ETFs] are eligible class of Investment, and as a part of “Mutual Fund” exposure.
All Exposure and Prudential Norms applicable for investments in Mutual Funds covered under Para 1.3 of this
Master Circular shall apply for investment made in Debt ETFs, in addition to the following conditions:
1. The Debt ETFs shall be issued by Mutual Funds registered with SEBI and governed by SEBI (Mutual Funds)
Regulations, 1996, as amended from time to time.
2. The Debt ETF shall invest in a basket of Securities issued by CPSEs which are part of constituents of a publicly
available index.
3. The minimum investment by the Insurer shall not be less than Creation Unit size and it shall not be reduced to
below Creation Unit Size.
4. “All” Securities in the Index shall be complied with rating criteria as per Regulation 3 of IRDAI (Investment)
Regulations, 2016 for it to part of “Approved Investment”. If any of the underlying securities gets downgraded
below “AA”, the Debt ETF shall be automatically reclassified under “Other Investment”.
1.4 INVESTMENT IN ASSET BACKED SECURITIES (ABS), PASS THROUGH CERTIFICATES

(PTCs) AND SECURITY RECEIPTS (SRs)
1. Insurers are permitted to invest in Asset Backed Securities (ABS) / Pass Through Certificates (PTCs) with
underlying Housing and / or Infrastructure assets [as defined under Regulation 2(h) of IRDAI (Investment)
Regulations, 2016, as amended from time to time].
2. Investment in Asset Backed Securities (ABS) / Pass Through Certificates (PTCs) / Security Receipts (SRs) with
underlying Housing and / or Infrastructure Assets, shall form part of “Approved Investments”, subject to following
exposure and prudential norms:
a) ABS / PTC /SR must be rated not less than AAA or equivalent by a Credit Rating Agency, registered under
SEBI (Credit Rating Agencies) Regulations, 1999
b) The investment in ABS / PTC / SR with underlying Housing and / or Infrastructure assets shall at ‘all times’
not exceed 10% of respective fund(s) in the case of Life Insurers and not more than 5% of Investment
Assets in the case of General Insurers
3. If the ABS / PTC / SR with underlying Housing and / or Infrastructure assets are downgraded below AAA such
investment shall be automatically be re-classified as “Other Investments”.
4. In case the cash-flows from such instrument are not received on due dates, the investment in such assets shall
be automatically be re-classified as “Other Investments” from such date for reporting in FORM 3A (Part A) /
FORM 3B of IRDAI (Investment) Regulations, 2016
8 IRDA/F&I/CIR/INV/222/12/2019 Dt11th Dec,2019

5. The investments in securitized assets, both under Approved and Other Investments, taken together shall not
exceed 10% of respective fund size in the case of Life Insurers and not more than 5% of Investment Assets in
the case of General Insurers.
6. The Insurer, as a part of risk management, shall split the investment in ABS, PTCs and SRs over different
issuers and tenures
7. All guidelines of Classification, Income Recognition and Valuation of Assets issued by the Authority shall be
applicable to these investments.
1.5 INVESTMENT IN ALTERNATIVE INVESTMENT FUND (AIF)9
1. Investments in Category I and II AIF (within SEBI Regulations) are permitted as a part of “Other Investments”.
Insurers are permitted to invest in Category I AIFs which is an Infrastructure Fund, SME Fund, Venture Capital
Fund and Social Venture Fund as defined in SEBI AIF Regulations. Insurers are permitted to invest in a
Category II AIFs which invests a minimum of 51% of the funds in the Infrastructure entities or SME entities or
Venture Capital undertakings or Social Venture entities in aggregate.
2. All restrictions under Insurance Act, 1938 and IRDAI Investment (Regulations) 2016 regarding investing of funds
outside India, promoter group, combined exposure limits in venture capital funds and AIFs under the Other than
Approved category of investments will continue to apply.
3. Insurers are not permitted to invest in in AIFs where rights attached to units are varied.
4. (a) No investment is permitted into AIFs which undertake leverage or borrowing other than to meet day-to-day
operational requirements and as permitted under SEBI (Alternative Investment Funds) Regulations, 2012.
(b) Insurer shall invest only into Fund of Funds (FoF) which comply requirement of Section 27E of the Insurance
Act, 1938.
(c) Insurer shall ensure compliance with Section 27E by a clause in the Fund Offer Documents executed by FoF
to restrain such FoF investing into AIFs which invest in overseas companies/funds.
(d) No Insurer shall invest in an AIF, which in turn has exposure to a FoF, in which the Insurer has taken an
exposure.
(e) The Insurer on a quarterly basis, obtain a certificate issued by the Concurrent Auditor on the compliance of
the above conditions and file the same along with quarterly periodical returns.10
5. Insurers should ensure that AIFs do not invest in securities of companies incorporated outside India to comply
with the provisions of Section 27E of the Insurance Act, 1938
6. The sponsor of such Alternative Investment Fund should not be from the promoter group of the Insurer. The
Fund shall not be managed by an Investment Manager who is either directly or indirectly controlled or managed
by the Insurer or its promoters
9IRDA/CIR/INV/020/2008-09 Dt. 22nd Aug 2008,

IRDA/F&I/Cir/INV/203/2011 Dt. 30th Aug, 2011,
IRDA/F&I/INV/CIR/054/03/2013 Dt. Mar, 2013,
IRDA/F&I/INV/CIR/172/08/2013 Dt. 23rd Aug, 2013
10 IRDAI/F&I/CIR/INV/074 Dt Apr 2021

7. The investments in Category I AIF shall be shown under category code ‘OAFA’ and Category II AIF shall be
shown under category code ‘OAFB’
8. Investment in the AIF and investments in Venture Funds shall be subject to the following exposure norms:
Overall Exposure to
Type of Insurer VFs &AIFs Exposure to single AIF/Venture Fund
(all taken together)
(a) (b) (c)
Life Insurer 3% of respective Fund 10% of AIF /VF size
or
20% of Overall Exposure as per (b),
whichever is lower.
The above ‘10%’Limit shall be read as

‘20%’ in case of Infrastructure Fund
General Insurer 5% of Investment Assets 10% of AIF /VF size

or
20% of Overall Exposure as per (b),
whichever is lower.
The above ‘10%’ Limit shall be read as

‘20%’ in case of Infrastructure Fund
1.6 DEBT SECURITIES ISSUED BY BANKS
a. Investment in Perpetual Debt Instruments of Bank’s Tier-I Capital and Debt instruments of Upper Tier-II
Capital11
The Reserve Bank of India [vide Master Circular DBOD.No.BP.BC.57/21.01.002/2005-2006 Dt. 25th Jan, 2006] has
allowed banks to raise Capital through issue of Hybrid Instruments as under for augmenting Capital Adequacy
Norms:
a. Innovative Perpetual Debt Instruments for inclusion as Tier 1 Capital

b. Debt Capital Instruments eligible for inclusion as Upper Tier 2 Capital
c. Perpetual Non-Cumulative Preference Shares for inclusion as Tier 1 Capital; and
d. Redeemable Cumulative Preference Shares eligible for inclusion as Tier 2 Capital
The above Instruments shall be part of ‘Approved Investments’ under IRDAI (Investment) Regulations, 2016, subject
to the following conditions:
11IRDA/CIR/INV/020/2008-09 Dt. 22nd Aug 2008

1. The Debt Instrument issued by Banks in Private Sector shall be rated not less than ‘AAA’ and those issued by
Banks in Public Sector shall have rating not less than ‘AA’ by an independent Rating Agency, registered under
SEBI
2. Preference shares issued by the Banks shall satisfy the conditions specified under Regulation 3 (a) of IRDAI
(Investment) Regulations, 2016
3. All Exposure norms as specified in Regulation 9 of IRDAI (Investment) Regulations, 2016 shall apply to these
Hybrid Debt Instruments / Preference Shares Issued by the Banks
4. Where the Hybrid Debt Instrument is downgraded below ‘AAA’, in the case of Private Sector banks and (below
AA in the case of Public Sector Banks) such investments shall be re-classified as ‘Other Investments’ and
reported in FORM 2 of IRDAI (Investment) Regulations, 2016
5. In case the Interest on the Instrument is not serviced on due dates, the Investment in such Hybrid instruments
shall be automatically re-classified as ‘Other Investments’ from such date and reported in FORM 3A (Part A) or
FORM 3B (Part A) of IRDAI (Investment) Regulations, 2016 in respect of Life and General Insurers respectively
6. All guidelines for Classification, Income Recognition and Valuation of Assets issued by RBI shall be applicable
for these Investments.
b. Bank’s Capital Instruments under Basel III – Investment by Insurance Companies12
Insurers can invest in the following instruments, issued by Domestic Banks as Tier II Capital, prescribed under Basel
III framework, as part of ‘Approved Investments’ under IRDAI (Investment) Regulations, 2016, subject to conditions
mentioned below:
a. Debt Capital Instruments (DCI)

b. Redeemable Non-Cumulative Preference Shares (RNCPS)
c. Redeemable Cumulative Preference Shares (RCPS)
1. The Debt Instruments issued by Banks shall be rated not less than ‘AA’ by an independent Rating Agency,
registered under SEBI
2. Where the Instruments are downgraded below ‘AA’, such investments shall be automatically re-classified as
‘Other Investments’
3. Preference shares issued by the Banks shall satisfy the conditions prescribed in Regulation 3(a)(5) of IRDAI
(Investment) Regulations,2016
4. In case the Interest on the Instrument is not serviced on due date, the Investment in such instruments shall be
automatically re-classified as ‘Other Investments’ from such date of reporting to the Authority
5. All Exposure norms prescribed in Regulation 9 of IRDAI (Investment) Regulations, 2016 shall apply to these
Instruments/Preference Shares Issued by Banks
6. Investments in these instruments shall be classified under ‘Financial and Insurance Activities’ sector (BFSI)
12IRDA/F&I/CIR/INV/063/02/2014 Dt. 13th Feb 2014

c. Long Term Bonds by Banks – Financing of Infrastructure and Affordable Housing13
Investment in Long Term Bonds issued by Banks, for financing “Infrastructure and Affordable Housing” shall be
reckoned for Insurers mandatory investment in ‘Infrastructure & Housing sector’ subject to the following conditions:
1. All Exposure norms i.e. Single Investee, Group and Industry exposures etc. as specified in Regulation 9 of
IRDAI (Investment) Regulations, 2016 shall continue to apply
2. Minimum rating requirements to qualify as ‘Approved Investment’ shall be as per extant Investment Regulations
d. Investment in “Additional Tier 1 (Basel III Compliant) Perpetual Bonds” [AT1 Bonds]
Insurers can invest in Additional Tier 1 (Basel III Compliant) Perpetual Bonds [AT1 Bonds], which confirm to the
following:
1. The rating of AT1 Bonds shall be not less than “AA”, at the time of investment
2. The Offer document, in the case of IPOs of AT1 Bonds, shall have a provision for listing in at least one of the
Exchanges
3. The aggregate value of AT1 Bonds held in a particular Bank, at any point of time, shall not exceed 10% of the
total outstanding AT1 Bonds, of that particular Bank.
4. The Common Equity Tier I Capital (CET) including Capital Conservation Buffer, of the issuer Bank shall be more
than 9.0% at the time of investment in AT1 Bonds of such Bank.
5. a. The issuer bank should not have cancelled/deferred any coupon payment on its debt instruments including
AT1 bonds in the preceding three financial years.
b. The issuer bank shall have reported net profit after tax for the preceding two years and having a positive
accumulated profit as per the latest audited balance sheet.
c. The issuer bank has not reported any divergence in the asset classification and provisioning, identified by
RBI, in its latest audited balance sheet.14
6. The AT1 Bonds shall be forming part of “Equity” in complying with IRDAI (Investment) Regulations, and Master
Circular issued thereunder
7. No investment shall be done in AT1 Bonds, where the issuer Bank is either under the Promoter Group of Insurer
or Corporate Agent of the Insurer
13IRDA/F&I/CIR/INV/213/09/2014 Dt. 12th Sep 2014

14 IRDAI/FI/CIR/INV/165/8/2022 Dt.3rd August 2022

1.7 OTHER SPECIFIC BONDS / NON-CONVERTIBLE DEBENTURES (NCDs)
a. Investment 8.15% GIO FCI Special Bonds, 2002 & 8.03% GOI FCI Special Bonds, 2024
As these “Special Bonds” meet the requirement of “Approved Securities” as defined in Section 2(3) (i) of Insurance
Act 1938, Insurers can invest in such “Special Bonds” and they shall be classified under “Other Approved Securities”
for the purpose of pattern of Investments
b. Investment in Oil Companies GOI Special Bonds
1. Insurers investment into the following ‘GOI Special Bonds’ shall form part of ‘Other Approved Securities’, for
pattern of Investments, as prescribed under IRDAI (Investment) Regulations, 2016:
 8.01% Oil Companies GOI Special Bonds, 2023 (announced vide RBI Press release Dt. 15th Dec,
2006)
c. Investment in IIFCL Taxable Bonds – Approved Securities15
1. India Infrastructure Finance Company Limited has issued Taxable Bonds amounting to ` 2,100 Crores as
mentioned below:
Amount
No. Date Bond Date of Maturity
(Rs. Crore)
1 18-12-2007 8.82%IIFCL2022 200.00 18-12-2022
2 17-11-2008 9.35%IIFCL2023 200.00 17-11-2023
3 18-12-2008 8.68%IIFCL2023 200.00 18-12-2023
4 08-04-2009 8.10%IIFCL2024 500.00 08-04-2024
5 28-04-2009 7.90%IIFCL2.24 500.00 28-04-2024
2. As the repayment of principal and interest of the above Bond (vide File No: 18/04/2009/IF-1 Dt. 27th July 2009)
are guaranteed by Government of India, which fulfils the requirements of “Approved Securities” under Section 2
of Insurance Act, 1938 subscription to these bonds will not be subject to Regulation 9 of IRDAI (Investment)
Regulations, 2016as amended from time to time.
3. Also, the above bonds shall form part of “Infrastructure Investment” for the purpose of pattern of investment
under IRDAI (Investment) Regulations, 2016
15IRDA/F&I/CIR/INV/036/09/2009 Dt 17th Sep 2009

d. Investment in IIFCL Tax free Bonds – Approved Securities16
1. Tax Free Bonds issued by India Infrastructure Finance Company Limited (IIFCL)for Rs 1000 Crores, with
unconditional and irrecoverable guarantee covering repayment of principal and interest by Government of India
(vide file no. 18/24/Jan2008/IF-1 Dt. 15th, 2009) shall be part of ‘Approved Securities’ as defined under Section
2 of Insurance act, 1938.
2. The above Bonds will not be subject to any exposure norms specified under IRDAI (Investment) Regulations,
2016 as amended from time to time. Further, investments in the said bonds, will qualify for mandatory
‘Infrastructure Investments’
e. Investment in Indian Depository Receipts (IDR)17
Investment in IDR by any insurer would amount to an indirect investment made outside the country and would not be
in compliance with Section 27 of Insurance Act, 1938 (Prohibition for investment of funds outside India) that restricts
the investment of policyholders’ funds directly or indirectly outside the country
f. Investment in Infrastructure Debt Fund - NBFC18
1. Investment in Infrastructure Debt Fund, backed by Central Government as approved by the Authority, on a case
to case basis shall be reckoned for“ investments in infrastructure”
2. Investment in Rs.500 Crores Non- Convertible Debentures of M/s India Infradebt Ltd will form part of
Investments in Infra Sector by the Insurers
3. The exposure limits and Industrial classification of such investment will be as per Note 3 to Regulation 9 of IRDA
(Investment) Regulations, 2016and Circulars issued there under
g. Investment in Infrastructure Debt Fund – Mutual Fund 19
1. Investment in Infrastructure Debt Fund (IDF), backed by Central Government, on a case to case basis shall be,
approved by the Authority, to reckon for “investments in infrastructure”
2. Insurers investment in Asset Management Companies – IDF Mutual Fund Schemes, approved by IRDAI, shall
be reckoned as part of “investment in Infrastructure”
3. Insurers investment in the following IDF-MF shall be reckoned as investment in Infrastructure sector subject to
the following:
a. Such investments shall be categorized as ‘other investments’
b. Insurer can invest up to 20% of the Assets Under Management (AUM) of the Schemes referred
c. Such Investments are subject to overall exposure limits and other conditions applicable to Mutual Funds
16IRDA/INV/CIR/036/2008-09 Dt 06th Feb 2009

17IRDA/INV/CIR/015/June 09 Dt 04th June 2009
18IRDA/INV/CIR/193/09/2013 Dt 26th Sep 2013
19IRDA/INV/CIR/194/09/2013 Dt 26th Sep 2013

No Name of the AMC Name of the Scheme
1 IL&FS Infra Asset Management Ltd.# IL&FS Infrastructure Debt Fund
# No new investment in the above shall be reckoned as investment in infrastructure sector.
h. Investment in M/s L&T Infra Debt Fund – NBFC20
1. Insurer’s investment in Infrastructure Debt Fund, backed by Central Government, approved on a case to case
basis, by IRDAI shall be reckoned for investments in infrastructure.
2. Insurer’s investment into Rs. 500 Crores of Secured, Redeemable and Non- Convertible Debentures of M/s L&T
Infra Debt Ltd, shall be reckoned as a part of “Investments in Infrastructure”
3. The investment shall be subject to all exposure norms under Note 3 to Regulation 9 of IRDAI (Investment)
Regulations, 2016 along with Circulars and Guidelines issued there under.
4. The categorization of the above investments between “Approved Investments” or “Other Investments” shall be
based on the rating of the instrument from time to time
i. Investment in Onshore Rupee Bonds issued by Asian Development Bank (ADB) and International
Finance Corporation (IFC) 21
1. The Central Government, in exercise of the powers conferred under clause (iia) of sub section (h) of Section 2 of
SCRA, 1956 declared “Onshore Rupee Bonds” issued by multilateral institutions like the Asian Development
Bank and the International Finance Corporation as “Securities” within the meaning of subsection (h) of Section 2
of the SCRA, 1956 vide Gazette notification Dt. 1st August, 2014
2. Insurers are permitted to invest in the proposed Onshore Rupee Bonds of International Finance
Corporation(IFC) of $ 5 Billion equivalent fund, as a part of “Approved Investments” [in exercise of powers
conferred by Insurance Act, 1938 under Section 27A(1)(s) for Life Insurers and under Section 27B(1)(j) for
General Insurers] over 10 year period, for utilizing the bond proceeds to fund IFC’s projects in India that require
Rupee financing, subject to the following:
a. The Bonds are governed by norms, if any, laid by Government of India,

b. Public Issue of Bonds shall be duly approved by SEBI
c. The proceeds of the issue shall mean for investment in India as per Section 27Eof Insurance Act, 1938
d. Bonds shall fulfill the rating criteria for “Approved Investments” under IRDAI(Investment) Regulations, 2016
as amended from time to time. Where SEBI exempts the rating requirement from the rating agencies
registered with SEBI in view of the rating obtained from International rating agencies, then such equivalent
rating, applicable for “Approved Investments” under IRDAI (Investment) Regulations, 2016, received from
International rating agencies shall be considered
20IRDA/INV /CIR/008/01/2014 Dt. 07th January 2014

21IRDA/F&I/CIR/INV/196/08/2014 Dt. 14th Aug 2014

e. Where most of the proceeds are invested in “Infrastructure”, the investment shall qualify for “Infrastructure
Investments”, else the same shall be classified as a part of BFSI exposure.
j. Investment in M/s India Infradebt Limited IDF– NBFC 22
1. Insurers Investment in the additional issue of Rs. 500 Crores of Non-Convertible Debentures of M/s India
Infradebt Ltd., shall be reckoned as part of Investments in Infra Sector, along with the earlier issue Rs.500
Crores.
2. The exposure limits and Industrial classification of such investment in the above shall be subject to Note 3 to
Regulation 9 of IRDA (Investment) Regulations, 2016 read with Circulars and Guidelines issued.
based on the rating of the instrument from time to time.
k. Investments in IDFC Infra Debt Fund Limited - NCD
1. Insurers Investment in the additional issue of Rs. 1000 Crore of Non-Convertible Debentures of M/s IDFC Infra
Debt Fund Limited shall be reckoned as part of Investments in Infra Sector, along with the earlier issue of
Rs.1500 Crores.
2. The exposure limits and Industrial classification of such investment in the above shall be subject to Note 3 to
Regulationn9 of IRDA (Investment) Regulations, 2016 read with Circulars and Guidelines issued.
based on the rating of the instrument from time to time.
1.8 DERIVATIVES
a. Exposure to Interest Rate Derivatives23
Financial Derivatives are permitted to “hedge” Interest Rate Risk of Forecasted Transactions; in accordance with
the guidelines issued by the Authority vide Regulation 15 of IRDAI (Investment) Regulations, 2016. Accordingly,
Insurers can enter Forward Rate Agreements (FRAs), Interest Rate Swaps (IRS), Exchange Traded Interest Rate
Futures (IRF) to “hedge” Interest Rate risk on forecasted transactions, for Life, Pension & General Annuity
Business and General Insurance Business. Interest Rate Derivatives are not permitted for ULIP Business
A. Insurers are allowed as user with following types of Rupee Interest Rate Derivatives to the extent permitted, and
in accordance with these guidelines.
i. Forward Rate Agreements (FRAs);
ii. Interest Rate Swaps (IRS); and
iii. Exchange Traded Interest Rate Futures (IRF).
22IRDA/INV/CIR/250/11/2014 Dt. 26th Nov 2014

23IRDA/F&I/INV/CIR/138/06/2014 Dt. 11th June 2014

Participants can undertake different types of plain vanilla FRAs/IRS. IRS having explicit/implicit options
features are prohibited. It is to be noted that FRAs and IRS are Over-the-counter (OTC) contracts
B. RBI Circulars & Guidelines on Rupee Interest Rate Derivatives
Insurers are required to adhere to the following RBI Circular / Guidelines, as amended from time to time, on
Rupee Interest Rate Derivatives:
i. IDMC:MSRD.4801/06.01.03/2002-03 Dt 3rdJun, 2003
ii. RBI/FMRD/2021-22/84 FMRD.FMD.07/02.03.247/2021-22 September 16, 2021
Also, Insurers shall comply with circulars issued and amended from time to time, by Securities and Exchange
Board of India (SEBI) on Rupee Interest Rate Derivatives
C. Permitted Purpose for Exposure to Interest Rate Derivatives
Hedging for forecasted transactions

i. Reinvestment of maturity proceeds of existing fixed income investments;
ii. Investment of interest income receivable;
iii. Expected policy premium income receivable on the Insurance Contracts which are already underwritten in
Life and Pension & Annuity business in case of Life Insurers and General Insurance business in case of
General Insurers.
The overriding principle of any use of the above listed derivatives is that they must be used only for hedging to
reduce interest rate risk. The Insurer should have a system to clearly track the Interest rate risk.
To consider expected policy premium income for hedging, Insurers shall document and justify persistency
assumptions as part of the hedge program development process. Assumption documentation and justification
shall indicate the joint review and approval of both Appointed Actuary and CRO under the oversight of the
Insurer’s Board (for example, via the Asset Liability Management Committee)
D. Regulatory Exposure and Prudential Limits
i. Counter parties shall necessarily be Commercial Banks and Primary Dealers (PDs) as permitted by RBI
for FRAs and IRS.
ii. Insurers dealing in FRAs and IRS have to arrive at the credit equivalent amount for the purposes of
reckoning exposure to counter-party.
For the purpose of exposure norms, Insurance companies shall compute their credit exposures, arising on
account of Interest rate derivative transactions using the Current Exposure Method (CEM) as detailed below:

 The Credit Equivalent Amount of a market related off-balance sheet transaction calculated using the current
exposure method is the sum of current credit exposure and potential future credit exposure of these
contracts.
 Current credit exposure is defined as the sum of the gross positive mark-to-market value of these contracts.
The Current Exposure Method requires periodical (at agreed periodicity) calculation of the current credit
exposure by marking these contracts to market, thus capturing the current credit exposure.
 Potential future credit exposure is determined by multiplying the notional principal amount of each of these
contracts irrespective of whether the contract has a zero, positive or negative mark-to-market value by the
relevant add-on factor indicated below according to the nature and residual maturity of the instrument.
Credit Conversion Factors:

Notional principal amount of each FRA/IRS shall be multiplied with the following conversion factor:
Residual Maturity Conversion Factor per year

One year or less 0.5 per cent
Over One year to five year 1.0 per cent
Over five years 3.0 per cent
[Example: If IRS of Rs. 10 crore with maturity of 4 years is entered into by the Insurance company with the
counter party A, then the potential future credit exposure = 10 x 3.5% = Rs. 0.35 crore (i.e. 3.5% = 0.5% for First
year + 1% for next each year for 3 years as the duration is 4 years)]
i. The Credit Equivalent Amount of the FRA / IRS shall be used for reckoning counter party credit exposure for
the purposes of the IRDAI (Investment) Regulations, 2016 as amended from time to time
ii. For exchange traded IRFs, the industry exposure limit is calculated against the Central Counter Party i.e.
Clearing Corporation on the basis of above Credit Equivalent Amount.
iii. Exposure limits pertaining to single Issuer, Group and Industry will be applicable for the exposure through
FRA and IRS contracts. Counter party rating shall be considered for calculating pattern of investments. The
limits shall be reported in the remarks column of the respective quarterly returns.
iv. A Participant’s dealing in Interest Rate derivatives under these guidelines shall in aggregate not exceed an
outstanding notional principal amount equivalent to 100% of the book value of the fixed income investments of
the Participant under the Policyholders Fund and the Shareholders Funds taken together. Life Insurers shall
normally adhere to the 100% limits based on respective funds i.e. Life and P&A Fund. But where, in the case
of Funds, the book value of the existing investments is lower than the expected premiums on the underwritten
insurance contracts, the Insurer can utilize the exposure limit available in other funds within the overall 100%
limit, provided the Board of the Insurer specifically approves, prior to entering into such derivative contract.
The MTM gain/loss arising out of the effective hedge shall be borne by the respective fund only
v. If reinvestment of maturity proceeds of the existing investments/ interest income receivable on investments is
hedged, such investments shall be held till maturity. If unavoidable need arises to liquidate instrument to meet
the ALM, the hedge on such instrument has to be unwound simultaneously after obtaining specific approval

from Investment Committee. IC shall grant such approval after due recording of the reasons, provided the
charges for unwinding the derivative contract is borne by the Shareholder
E. Insurers shall ensure all documentation requirements complete in all aspects as per RBI guidelines and
documentation prescribed by ISDA (International Swaps and Derivative Association). Further, to settle the mark
to market profits/losses and maintenance of collateral, two-way CSA (Credit Support Annex - an agreement
between counterparties on the types of collateral and posting mechanism) agreements shall be mandatory to
mitigate counterparty risk. All derivative contracts shall be subject to conditions mentioned in Indian laws &
Jurisdiction of Indian courts and shall be consistent with Regulations / Circulars / Guidelines issued in this
regard. Suitable clauses shall be incorporated to comply with the Insurance Act, 1938, IRDAI (Investment)
Regulations, 2016, SEBI Regulations, RBI Guidelines applicable. Insurers shall necessarily have power to
terminate the contract as and when desired.
F. Accounting of Interest Rate Derivatives shall be as per Accounting Standard as prescribed by ICAI and as
amended from time to time. The presentation in the financial statements and disclosures shall be governed by
Accounting Standards issued by ICAI. Further, the Insurer shall disclose the following in the Financial
statements:
i. Description of Participant’s financial risk management objective and policies, in particular its policy for
hedging forecasted transactions.
ii. Hedging strategy.
iii. Accounting Policy for Derivatives.
iv. Nature and terms of outstanding Interest Rate derivative contracts.
v. Quantification of the losses which would be incurred if counter-parties failed to fulfil their obligation
under the outstanding Interest Rate derivative contracts.
G. Internal Risk Management Policy & Processes, Exposure & Prudential Limits
Each participant should, before taking exposure to Interest Rate derivatives, frame detailed pre-approved risk
management policy by the Board of Insurer, which shall cover the following minimum:
i. Insurer’s overall appetite for taking risk and ensure that it is consistent with its strategic objectives,
capital strength etc.
ii. Define the approved derivatives products and the authorized derivatives activities.
iii. provide for sufficient staff resources and other resources to enable the approved derivatives activities
to be conducted in a prudent manner;
iv. ensure appropriate structure and staffing for the key risk control functions;
v. establish management responsibilities;
vi. identify the various types of risk faced by the Insurer and establish a clear and comprehensive set of
limits to control these;

vii. establish risk measurement methodologies which are consistent with the nature and scale of the
derivatives activities;
viii. require stress testing of risk positions;
ix. detail the type and frequency of reports which are to be made to the board (or committees of the
board);
x. Applicable VAR limits.
xi. Circumstances for termination and closure of the contract.
xii. accounting treatment of the proposed derivatives in the company, and
xiii. Solvency / capital impact due to the use of derivatives.
The implementation of the policy shall be the responsibility of the Investment committee (IC) under the oversight
of Insurer’s Board. The Insurer shall intimate the Authority, prior to taking any derivative exposure, as per the
Guidelines issued.
H. Suitability and Appropriateness Policy
The Board shall ensure that the Rupee Interest Rate Derivatives address the need of the portfolio handled by the
Insurer and are clearly mapped to Products of the Insurer. The Board shall confirm the suitability and
appropriateness as evaluated in terms of clause 5.1.3 of RBI/FMRD/2021-22/84 FMRD.FMD.07/02.03.247/2021-22
Dt.16th September,2021 Master Direction- Reserve Bank of India (Market-makers in OTC Derivatives) Directions,
2021.
I. Corporate Governance
In taking exposure to potentially complex products the Board and the senior management of insurer should take note
of the nature of the risk undertaken, complexities involved, stress levels etc. Insurance companies shall at least once
in a Quarter, report their Derivative Positions / Transactions and Policy / Limits compliance to Risk Management
Committees under the Board of the Insurer. At periodical intervals (at least once in an year), the Board of Directors
shall review the contracts undertaken and satisfy themselves that adequate risk measurement, management policy
and procedures for interest rate risk with fixed income derivative contracts permitted in these guidelines, have been
established and are functional.
J. Chief Risk Officer (CRO) Role & Responsibilities
The CRO, shall be responsible for monitoring / reporting of all aspects of “each” derivative program and shall report
compliance to the Asset Liability Management Committee / Risk Management Committee of the Board and also to
the Board of the Insurer. Where any particular hedging program is not in compliance with the Circular / Guidelines
issued in this regard, the CRO shall identify the same and shall be responsible to bring the program to compliance.

b. Exposure to Credit Default Swaps24
1. The Reserve Bank of India, vide notification No. RBI/2021-22/88 FMRD.DIRD. 10/14.03.004/2021-22 dated
February 10, 2022 has issued the ‘Master Direction – Reserve Bank of India (Credit Derivatives) Directions,
2022’ effective from 10th February, 2022. The said guidelines inter alia, provide for insurer’s participation as
protection buyer and seller for Credit Default Swaps in OTC market.
2. Insurers are allowed only as “Users” (protection buyers) of CDS subject to the following:
a. The CDS are permitted as a “hedge” to manage the Credit Risk covering the credit event. The category of
the investment will not change pursuant to buying CDS on such underlying.
b. CDS will be allowed only on listed corporate bonds as reference obligations. CDS can also be bought on
unlisted but rated bonds of Infrastructure companies. Besides, unlisted / unrated bonds issued by the SPVs
set up by the infrastructure companies are also eligible as reference obligation as permitted in the RBI
Master Direction Dt. 10th February, 2022.
c. On purchase of protection, the exposure with respect to reference entity shall shift to “Protection Seller” to
the extent of “Protection Purchased” within Regulation 9 of the IRDAI (Investment) Regulations, 2016 and
such exposure shall form part of BFSI Sector, under Industry Sector Exposure.
d. CDS shall not be purchased:
i. On Reference Asset belonging to the promoter group and NO CDS transaction shall be made between
entities belonging to Promoter Group.
ii. On The obligations such as asset-backed securities/mortgage-backed securities, convertible bonds and
bonds with call/put options, CLOs, CDOs or any other pool of assets/loans.
3. Insurers shall comply with all other norms pertaining to the eligibility norms for the counter party to the User,
reference obligation, requirement of underlying, conditions while exiting the CDS transactions by Users, Credit
events, settlement methodologies, documentation, pricing/valuation methodologies, other requirements and
accounting norms etc. as prescribed by RBI vide Master Direction Dt. 10th February,2022.
1.9 REAL ESTATE INVESTMENT TRUSTS (REIT) AND INFRASTRUCTURE INVESTMENT TRUSTS
(INVIT):
a) Investment in Units of “Real Estate Investment Trusts (REIT) & Infrastructure Investment Trusts
(InvIT)”
Insurers can invest in Units of Listed REITs / Listed InvITs which conform to the following:
i. The REIT / InvIT rated not less than “AA” shall form part of Approved Investments. REIT / InvIT rated
less than AA shall form part of Other Investments.
24IRDA/INV /CIR/247/11/2012 Dt 27th Nov 2012

ii. The Investments in units of InvITs and REITs shall not exceed 3% of total fund size of the Insurer at any
point of time.
iii. No Insurer shall invest more than 5% of the Units issued by a single REIT / InvIT (including the current
issue) in a single InvIT/REIT.
iv. No investment shall be made in REIT /InvIT where the Sponsor is under the Promoter Group of the
Insurer
v. Investment in Units of InvIT will form part of “Infrastructure Investments”, for the purpose of Pattern of
Investments under IRDAI (Investment) Regulations
vi. Investment in Units of REIT will form part of Investment Property as per Note 6 to the Regulation 9 of
IRDAI (Investment) Regulations, 2016 read along with Master Circular – Investments.
vii. The Investment in Units of REIT / InvITs shall be valued at Market Value (last Quoted price should not
be later than 30 days). Where Market Quote is not available for the last 30 days, the Units shall be
valued as per the latest NAV (not more than 6 months old) of the Units published by the trust.
b) Investments in Debt Securities of “Real Estate Investment Trusts (REIT) & Infrastructure Investment
Trusts (InvIT)
Insurers can invest in “Debt Securities” issued by listed InvITs / REITs which conform to the following:
i. The debt Instruments shall be issued by listed InvITs / REITs and rated “AAA” at the time of Investment.
ii. The public holding in the InvIT / REIT shall not be less 30% of the total outstanding units of the InvIT / REIT
at the time of Investment. ]21b
iii. The Debt Instruments of InvIT / REIT shall be rated and not less than “AA” as a part of Approved
Investments.
iv. Debt Instruments of InvIT / REITs rated and or downgraded below “AA” shall form part of Other
Investments.
v. No Insurer shall invest more than 20% of the outstanding debt instruments (including the current issue) in a
single InvIT / REIT.
vi. The investment in Debt Instruments of REITs shall not exceed 3% of total fund size of the insurer at any
point of time.
vii. The investment in Debt Instruments of InvITs shall be subject to sectoral limits applicable to Infrastructure
Sector. ]25
viii. No investment shall be made in Debt instruments of an InvIT / REIT where the Sponsor is under the
Promoter Group of the Insurer.
ix. Group shall have the meaning as defined under Regulation 2(g) of IRDAI (Investment) Regulations, 2016
x. Investment in Debt Instruments of InvIT will form part “Infrastructure Investments”.
25IRDA/FI/CIR/INV/165/8/2022 Dt.3rd August 2022

xi. Investment in Debt Instruments of REIT will form part of industry group “Real Estate Activities” under NIC
Industry Classification.]26
xii. The Investment in Debt Securities of InvITs / REITs shall be valued either as per FIMMDA or at applicable
market yield rates published by any Rating Agency registered with SEBI.]27
1.10 CREDIT RATING- APPLICABLE FOR INFRASTRUCTURE INVESTMENTS

Insurers to classify Infrastructure investments, issued by Infrastructure Companies, rated not less
than “A” along with an Expected Loss Rating of “EL1” as part of “Approved Investment” and should be listed
under Category Code “IELB”. Further, any downgrade of Infrastructure Investment, below “A” or “EL1”, needs
to be re-classified as part of “Other Investments” and reported under Category Code “IOEL”. The valuation of
the above investments, shall be valued “either as per FIMMDA or at applicable market yield rates published by
any Rating Agency registered with SEBI28
1.11 DIVIDEND CRITERIA FOR EQUITY INVESTMENT UNDER “APPROVED INVESTMENT”

Insurers shall classify investments in Preference Shares and Equity Shares as part of “Approved Investment”
if dividend is paid on such Shares “for at least 2 years out of 3 consecutive years immediately preceding”
instead of “for at least 2 consecutive years immediately preceding” (as required under Regulation 3(a)(4) and
3(a)(5) of IRDAI (Investment) Regulations, 2016.29
1.12 EXPOSURE OF INSURERS TO BANKING, FINANCIAL SERVICES AND INSURANCE (BFSI)

ACTIVITIES
Insurers can have exposure to Financial and Insurance activities (as per section K of NIC classification) up to
30% of Investment assets. Accordingly, the limit of 25% of Investment Assets mentioned in Note no. 8 to
Reg.9 of IRDAI (Investment) Regulations, 2016 stands revised to a limit of 30% of Investment Assets.30
26 IRDAI/F&I/CIR/INV/098/04/2021 Dt.22nd Apr, 2021

27 IRDAI/F&I/CIR/INV/098/04/2021 Dt. 22nd Apr, 2021
28 IRDAI-F&I-CIR-INV-008-01-2021 Dt. 5th Jan, 2021
29 IRDA/FI/CIR/INV/165/8/2022 Dt.3rd August 2022
30 IRDAI/F&I/CIR/INV/81/04/2022 Dt: 29th April, 2022

2. RISK MANAGEMENT AND CONCURRENT AUDIT
2.1 INVESTMENT RISK MANAGEMENT SYSTEMS AND PROCESS
a. General
1. Front, Mid & Back Office Operations
i. Insurer with Assets under Management (AUM) in excess of Rs.500 Crores shall ensure separate
personnel acting as fund manager and dealer.
ii. The Investment System (Application Software) should have separate modules for Front, Mid and Back
Office with separate login.
iii. Data transfer from Front Office to Back Office should be through the System, on Real time basis.
iv. The Insurer may have multiple Data Entry Systems, but all such Systems should be seamlessly
integrated without manual intervention.
v. The Front Office shall report through the Chief Investment Officer (CIO) to the Chief Executive Officer
(CEO). The Mid Office and Back Office shall report to CFO who shall independently report to the CEO.
CIO and CFO shall be independent personnel with separate login. Further, CRO shall be responsible
for framing the Risk policy and through CEO shall report to the Risk Committee of the Insurer’s Board.
vi. The Investment Application should have clear segregation (at database level) between Front, Mid and
Back Office
2. Employee Dealing Guidelines
The Standard Operating Procedure (SOP) followed by the Insurer shall clearly specify the Guidelines to
be adhered by employees in the Front, Mid and Back Office for personal investments. The Internal /
Concurrent Auditor shall report on compliance to adherence to this requirement.
3. Maker Checker Process
Insurer should have the procedure of Maker / Checker mapped in their Standard Operating Procedure /
Operations Manual of Investment Operations. The Internal / Concurrent Auditor shall comment on such
practice in his report.
4. Audit Trail at Data Entry Points
The Audit trail should be available at all data entry points including the Checker / Authorizer level.
5. Business Continuity Process (BCP)
To ensure Business continuity, the Insurer should have an Off-site Back-up of Data in a City falling
under a different Seismic Zone, either on his own or through a Service Provider. Further, the Insurer /

service provider (if outsourced) is required to have the necessary infrastructure for Mission Critical
Systems to address at least the following:
1. Calculation of daily NAV (Fund wise)

2. Redemption processing.
b. Front Office
1. Segregation of Fund Manager / Dealer
i. Investment Department should have documented the segregation of Fund Managers and Dealers
through Authority Matrix as a part of its ‘Standard Operating Procedure’.
ii. The Insurer should have documented the Access Controls and Authorization process for Orders and
Deal execution.
iii. The Dealing Room should have a Voice Recorder and procedure for maintaining the recorded
conversation and their disposal including procedure like no mobile phone usage in dealing rooms and
other best practices.
2. Investment in Investee / Group Company / Industry Sector
System based checks should be in place for investments in an Investee Company, Group, Promoter
Group and Industry Sector. The system should signal when the Internal / Regulatory limits are nearly
reached PRIOR to taking such exposure and making actual investment.
3. Intra Fund Transfer
i. There can be no transfer of securities:

a. Between Life fund, Pension Fund and ULIP fund(s).
b. Within Life Fund and Pension fund, systems should not allow any transfer between Par and Non-
Par funds.
c. Within Pension funds, the system should not permit any transfer between Individual and Group
funds.
ii. The Cut Off time shall be clearly specified in the SOP. Such cut off time shall remain consistent and
cannot be changed without the prior approval of the Board of the Insurer.
iii. The intra fund transfer should be like any other Market deal and the same needs to be carried out at the
Market rate at the cut off time.
c. Mid Office
1. Market Risk
i. The system should be capable of computing various portfolio returns.

ii. Exposure limits monitoring and Exception Reporting shall be done by the Mid Office

2. Credit Risk
i. The Investment System should capture Instrument Ratings to auto generate FORM 2 (Statement of
Downgraded Investments)
ii. System should automatically monitor various Regulatory limits of Instrument level, Group level,
Promoter Group level and Industry Sector level exposure.
iii. The System should have the ability to track changes in ratings over a period & generate appropriate
alerts, along with ability to classify investment between Approved and Other Investments
iv. The Insurer should conduct periodic credit reviews for all companies in the portfolio. The periodicity
should be clearly mentioned in the Investment Policy which shall not be more than a year.
v. The Insurer is required to keep a track of movement of Securities between Approved and Other
Investments Status, as a part of Audit trail, at individual security level.
3. Tracking of Regulatory Limits
i. The System should have key limits pre-set to ensure compliance for all Regulatory requirements and
should be supported by workflow through the System, (Real time basis) for such approval, if Regulatory
limit is close to be breached.
ii. The System should have capability of generating Exception reports for Audit by Internal / Concurrent
Auditor.
4. Settlement Risk
The System should be validated to restrict Short Sales at the time of placing the order.
5. Review, Monitoring and Reporting
i. System should automatically track and report all internal limits breaches. All such breaches should be
audited by Internal / Concurrent Auditor.
ii. Implementation and Review of & Liability Matching and other Investment Policy Guidelines.
d. Back Office
1. Data Input Error
The system should be specifically validated such that, Deal can be REJECTED ONLY by Back Office
and can NEVER BE EDITED. The System should generate a list of Deals that have not been settled /
rejected as a part of Audit trail.
2. Liquidity Risk
i. The Insurer should have a Cash Management System to provide the funds available for Investment
considering the settlement obligations and subscription and redemption of units etc., to prevent any
leveraged position or liquidity risk.
ii. The System should be validated not to accept any commitment beyond availability of funds.

3. Computation of ‘NAV’
i. The Insurer should maintain NAV history (Fund wise) in his Public Domain from the Start of the Fund to
Current Date. Also, the NAV should be uploaded in the Life Council Website on a day to day basis.
ii. ‘NAV’ error – Computation & Compensation

1. All expenses and incomes accrued up to the Valuation date shall be considered for
computation of NAV. For this purpose, while major expenses like management fees and other
periodic expenses should be accrued on a day to day basis, other minor expenses and
income can be accrued on a weekly basis, provided the non-accrual does not affect the NAV
calculations by more than 1% (one percent).
2. Any changes in Securities and in the number of Units should be recorded in the books not
later than the first valuation date following the date of transaction. If this is not possible, the
recording may be delayed up to a period of seven days following the date of the transaction.
Provided, the non-recording does not affect the NAV calculations by more than 1 (one
percent).
3. In case the NAV of a Plan differs by more than 1% due to non - recording of the transactions
or any other errors / mistakes, the investors or fund(s) as the case may be, shall be paid the
difference in amount as follows: -
(i) If the investors are allotted units at a price higher than NAV or are given a price lower
than NAV at the time of sale of their Units, they shall be paid the difference in amount by
the plan.
(ii) If the investors are charged lower NAV at the time of purchase of their units or are given
higher NAV at the time of sale of their units, the Insurer shall pay the difference in
amount to the Plan and shall be compensated from Shareholders portfolio that does not
support Solvency Margin.
(iii) The Internal / Concurrent Auditor shall look into the above issues and specifically report
to the Board’s Audit Committee on it and comment on the Systems in place to take care
of such issues on an ongoing basis.
(iv) A log of NAV errors shall be maintained in the System and be forwarded to Internal /
Concurrent Auditors.
4. Equity Deals to be put through STP gateway
All Equity deals shall be through STP gateway for all broker transactions.
5. Uploading of Valuation Price Files
The System shall have the provision take uploads of Corporate Actions such as Stock Splits, Dividend,
Rights Issue, Buy Back, Bonus issues etc., for computing NAV / Portfolio valuation.

6. Reconciliation
i. Fund wise, in the case of Life Insurers, reconciliation with Investment Accounts, Bank, and Custodian
records should be done on day-to-day basis for all types of products. In the case of ULIP products,
Units reconciliation with Policy Admin Systems should be ensured on a day to day basis.
ii. In the case of General Insurer / Re-insurer reconciliation with Investment Accounts, Bank and
Custodian records should be done on a day-to-day basis.
7. The total volume of the business including debt and equity given to each empanelled Broker shall be
monitored on rolling three months basis to ensure that none of the panel broker exceeds the limit of 5% of
the total actual secondary market transactions through brokers, up to that particular period.
2.2 AUDIT OF INVESTMENT RISK MANAGEMENT SYSTEMS & PROCESS, INTERNAL /

CONCURRENT AUDIT
1. IRDAI (Investment) Regulations, 2016 under Regulation 13 (D) (1) mandates certification by a Chartered
Accountant firm, for implementing Investment Risk Management Systems and Process, as per the procedure
laid down in the “Guidance note on Review and Certification of Investment Risk Management Systems and
Process of Insurance Companies”. Further, Regulation 13 (E) (2) requires all investment transactions covering
both Shareholders and Policyholders funds be audited through Internal or Concurrent Auditor.
2. Insurers having Assets under Management (AUM) not more than Rs.1000 Crores shall have its Investment
functions audited on a Quarterly basis through Internal Audit (either through internal resources or through firms
of Chartered Accountants) and Insurer with AUM of over Rs.1000 Crores (for the first time) shall appoint a firm of
Chartered Accountants as Concurrent Auditor to have its Investment transactions and related Systems audited
on a concurrent basis.
a. Audit of “Investment Risk Management Systems and Process”

1. The Insurer, shall through a Chartered Accountants firm, who is not the Statutory or Internal or Concurrent
Auditor of the concerned Insurer shall get certified the Investment Risk Management Systems and Processes as
per the ‘Guidance Note on Review and Certification of Investment Risk Management Systems and Process of
Insurance Companies’ issued by the Institute of Chartered Accountants of India (ICAI), in consultation with
IRDAI
2. All companies seeking IRDAI registration shall file a report certified by a Chartered Accountant firm, on the
preparedness of the applicant company to comply with the various Systems listed in the “Guidance Note on
Review and Certification of Investment Risk Management Systems and Process of Insurance Companies”, when
the company seeks R3 under IRDAI (Registration of Indian Insurance Companies) Regulations, as amended
from time to time. The report shall indicate further actions required to be taken by the company

3. The Investment Risk Management Systems and Process shall be reviewed once in two financial years or such
shorter frequency as decided by the Board of the Insurer (the gap between two such audits should not be more
than two years), by a Chartered Accountant firm and file the certificate issued by such Chartered Accountant,
with the Authority along with the first quarter returns.
b. Internal / Concurrent Audit of Transactions

1. All Insurers, having Assets under Management (Shareholders and Policyholders funds taken together) of not
more than Rs.1000 Crores shall have its transactions and related systems audited through its internal Audit
Department, headed by a Chartered Accountant, at least on a on Quarterly basis and where the AUM is equal or
over Rs. 1000 Crores (for the first time) shall have the Investment transaction concurrently audited, by a
Chartered Accountant firm, appointed as per the procedure listed below.
2. The ‘minimum’ Scope for both Internal Audit and Concurrent Audit shall be as per the “Guidance Note on
Internal / Concurrent Audit of Investment Functions of Insurance Companies” issued by ICAI (in consultation with
IRDAI) for both Life and Non-Life Insurers. The Insurer could include additional scope to suit their specific needs
based on their control systems. The Internal / Concurrent Audit shall cover 100% of transactions of all fund(s) as
per the periodicity prescribed.
c. Appointment of Audit Firms for “Investment Risk Management Systems & Process”
1. The Chartered Accountant firm shall be a firm, registered with the Institute of Chartered Accountants of India
2. The Audit firm should have experience, for at least four years, in conducting reviews of Risk Management
Systems and Process of either Banks or Mutual Funds or Insurance Companies or have, on behalf of IRDAI
conducted Investment Inspection of Insurance Companies
3. On the date of appointment as an Auditor for certifying Investment Risk Management Systems and Process, the
Auditor must not hold more than two audits of Internal, Concurrent and Risk Management Systems Audit, all
taken together. Hence, the Audit firm, can at the maximum hold not more than three Audits (i.e., Investment Risk
Management Systems and Process Audit, Internal Audit, Concurrent Audit – all taken together), apart from
Statutory Audits at any point of time. For this purpose, at the time of appointment, the insurer shall obtain a
declaration to this effect from the firm of Chartered Accountants. The Insurer shall, file with IRDAI, the
confirmation obtained from the Chartered Accountant firm, within 7 days of such appointment.
4. The Auditor should not have been prohibited/debarred by any regulating agency including IRDAI, RBI, SEBI,
ICAI etc.,
5. The Auditor appointed for certifying the Investment Risk Management Systems and Process, should not have
conducted the following assignments for the same Insurer proposing to be appointed as Systems Auditor, for a
period of two years immediately preceding his appointment.
a. Statutory Audit
b. Any Internal Audit
c. Any Concurrent Audit
d. Any consulting assignment, whether or not related to Audit functions

d. Appointment of Audit Firm for Internal / Concurrent Audit of Transactions
1. The Chartered Accountant firm complies with points c (1), (2), (3) and (4) above.
2. The Internal/Concurrent audit term shall be for the financial year and where the appointment is made during the
course of the financial year, it shall be up to the end of that financial year.
3. The Internal / Concurrent Auditor shall be appointed by the Audit Committee of the Insurer’s Board and the
Auditor shall directly report to the Audit Committee of the Insurer’s Board. Any change in Auditor during the
middle of the term, shall be communicated to IRDAI with the reasons for such change. The new Auditor, only for
the remaining term, shall be appointed only with the prior approval of IRDAI
4. The Internal / Concurrent Auditor shall not be eligible for re-appointment, with the same Insurer after serving
three consecutive years or three years during the preceding five years.
5. The Internal / Concurrent Auditor appointed for the first time should NOT have conducted the following
assignments for the same Insurer proposing to be appointed as Internal or Concurrent Auditor for Investment
functions during a period of two years immediately preceding his appointment as Internal or Concurrent auditor.
a. Statutory Audit
b. Any Internal Audit
c. Any Concurrent Audit
d. Any consulting assignment, whether or not related to Audit functions
e. Reviews or Certification of Investment Risk Management Systems and Process
6. Every Insurer, upon appointing the firm of Chartered Accountants as Internal or Concurrent or Risk Management
Systems Auditor shall send a communication to IRDAI, within seven days of such appointment, confirming such
appointment with the details as under:
e. Information of Audit Firm for Internal / Concurrent Audit to be filed with IRDAI
1. Name of the Chartered Accountant firm

2. Year of establishing the firm, Partners with contact details
3. Address of Head Office of the Audit Firm
4. Experience Details, (relevant for Insurer’s Risk Management Systems Audit / Statutory Audit / Internal Audit /
Concurrent Audit) as provided by the Firm
5. Name of the Partner along with contact details, responsible for signing Risk Management Audit Report / Internal
Audit Report/ Concurrent Audit Report
6. All the above information shall be filed with IRDAI, within 7 days from the date of appointment

All Insurers shall file a quarterly certificate issued by the Concurrent Auditor specifically on Repo transactions
(borrowing) and the same shall form part of the certificate issued as per the Technical Guide on Internal /
Concurrent Audit of Insurance Companies issued by ICAI.
2.4 INVESTMENT IN EQUITY EXCHANGE TRADED FUNDS31
Concurrent Auditor shall comment on the compliance of the requirements prescribed for investments in ETFs
during the audit period.
2.5 EXPOSURE TO CREDIT DEFAULT SWAPS32
1. The concurrent Auditor shall confirm that the requirements prescribed for undertaking CDS transaction have
been incorporated in the investment policy, before taking any exposure to CDS. Such Certificate of the
Concurrent Auditor, shall be filed with the Authority
2. The Concurrent Auditor shall in his Quarterly certification confirm that all CDS transactions, complies with the
norms prescribed by RBI and IRDAI
2.6 EXPOSURE TO INTEREST RATE DERIVATIVES 33
1. Before taking any exposure to Interest Rate Derivatives, the Insurer shall file a Certificate issued by the
Concurrent Auditor, and the Concurrent Auditor shall certify that the Insurer had implemented the minimum
integrated automated Systems and Process, as required under the guidelines on Interest Rate Derivatives.
2. Systems Audit: Any Insurer to hedge the portfolio, within the Circulars / Guidelines issued by the Authority, shall
carryout the Systems Audit, through the Auditor engaged as per the Guidance Note on “Investment Risk
Management Systems and Process of Insurance Companies” of the Institute of Chartered Accountant of India,
for Systems and Process to in place, as specifically listed for Derivatives in the Guidance Note on Investment
Risk Management Systems and Process of Insurance Companies, before taking such exposure. All insurers
who have taken derivative positions, shall unwind the positions, where there Systems and Process mandated
are yet to be implemented
31IRDA/F&I/CIR/INV/074/03/2014 Dt 03rd Mar, 2014

32IRDA/INV/CIR/247/11/2012 Dt 27th Nov 2012
33IRDA/F&I/INV/CIR/138/06/2014 Dt 11th Jun 2014

2.7 INVESTMENT IN “ADDITIONAL TIER 1 (BASEL III COMPLIANT) PERPETUAL BONDS” [AT1
BONDS]
The Concurrent Auditor in his Quarterly Report to the Audit Committee / Board of the Insurer shall confirm that
all norms as per 1.6 of Master Circular is complied with.
2.8 INVESTMENT IN UNITS AND DEBT SECURITIES OF “REAL ESTATE INVESTMENT TRUSTS
(REIT) & INFRASTRUCTURE INVESTMENT TRUSTS (INVIT)
The Concurrent Auditor in his Quarterly Report to the Audit Committee/Board of the Insurer shall specifically
confirm compliance to the provisions of this circular applicable to Investment in Units and Debt Securities of
REITs / InvITs.34
2.9 CONTROL & MONITORING MECHANISM OF INVESTMENT OPERATIONS – WORK FROM

REMOTE LOCATION
1. Insurers shall ensure that Concurrent Auditors shall check the deals entered/investments done while
working from remote location and report any deficiencies observed.
2. The Concurrent Auditor shall comment on the systems and controls as per the extant guidelines of ICAI and
also as per the internal/Board Approved controls/guidelines of the Insurer. The Insurers shall ensure to
submit the comments of Concurrent Auditors to the Authority as a part of Quarterly Concurrent Audit
Report.35
34 IRDAI/F&I/CIR/INV/098/04/2021 Dt. 22nd Apr, 2021

35 IRDAI/INV/001/2021

3. VALUATION GUIDELINES
3.1 INVESTMENT IN EQUITY EXCHANGE TRADED FUNDS36
The valuation of ETFs shall be in line with Annexure II of Master Circulars - Investments
3.2 SECURITIES LENDING AND BORROWING (SLB) FRAMEWORK37
1. Securities lent in SLB would be treated as if the Insurer owns such securities and all benefits arising on such
securities shall be available to the Insurer i.e. the beneficial rights of the Insurer shall continue as per the SLB
Frame work.
2. The lending fee shall be accounted for on accrual basis in view of the risk of early repay/recall of securities
3.3 INVESTMENT IN MUTUAL FUND38
1. The purchase and sale of Mutual Fund Units shall be calculated at Weighted Average Cost. Also, the insurer
shall report the aggregate Market Value of such Mutual Funds in FORM 5 of IRDAI (Investment) Regulations,
2016
2. A separate Fair Value Change Account for Mutual Fund Investments shall be maintained
3. The unrealized gains / losses arising due to changes in fair value of the Mutual Funds shall be taken to ‘Fair
Value Change – Mutual Fund’ account. The Profit / Loss on sale of Mutual Fund units, shall include accumulated
changes in the Fair value previously recognized in Mutual Funds under the heading “Fair Value Change –
Mutual Fund” in respect of a particular Mutual Fund and being recycled to Revenue / Profit and Loss Account on
actual sale of Mutual Fund units.
4. The Insurer shall assess, on each Balance Sheet date, whether any diminution in the value has occurred to the
Investment. A diminution in the value of investments shall be recognized as an expense in Revenue / Profit and
Loss Account to the extent of the difference between the re-measured fair value of the Investment and its Cost
as reduced by any previous diminution in value of investments is recognized as expenses in Revenue / Profit
and Loss Account. Any reversal of diminution in value of investments earlier recognized in Revenue / Profit and
Loss Account shall be recognized in Revenue / Profit and Loss Account.
5. In the case of Unit Linked Business, Mutual Fund units shall be valued at NAV.
36IRDA/F&I/CIR/INV/074/03/2014 Dt. 03rd March 2014


3.4 INVESTMENT IN PERPETUAL DEBT INSTRUMENTS OF BANK’S TIER-I CAPITAL AND DEBT
CAPITAL INSTRUMENTS OF UPPER TIER-II CAPITAL39
The valuation of AT1 Bonds and Tier II Bonds shall be as per the directions issued by SEBI for Mutual Funds
from time to time.
3.5 INVESTMENT IN ONSHORE RUPEE BONDS ISSUED BY ASIAN DEVELOPMENT BANK (ADB)
AND INTERNATIONAL FINANCE CORPORATION (IFC)40
The valuation of onshore rupee bonds shall be in line with the Corporate Bonds and Debentures.
3.6 EXPOSURE TO INTEREST RATE DERIVATIVES41
Accounting of Interest Rate Derivatives shall be as per Accounting Standard as prescribed by ICAI and
amended from time to time. Initial Margin and Mark to Market Margin shall be accounted as part of Current
Assets.
3.7 INCOME RECOGNITION, ASSET CLASSIFICATION, PROVISIONING AND OTHER RELATED

MATTERS
a. Assets classifications:
1. Every insurer shall make adequate provision for estimated loss arising on account of under recovery of loans
and advances (other than loans and advances granted against insurance policies issued by the insurer)
outstanding at the balance sheet date. These guidelines are intended to provide the basis for determination of
minimum provisions of loss on account of loans and advances
2. Insurers shall classify their loans/advances into four categories, viz., (i) Standard Assets, (ii) Sub-Standard
Assets, (iii) Doubtful Assets and (iv) Loss Assets. Classification of assets into these categories shall be done
taking into account ability of the borrower to repay and the extent of value and realizability of security.
3. Standard Assets:
Standard Asset is one which does not disclose any problem and which does not carry more than normal risk
attached to the Business. Such an asset is not an NPA. The insurer should make a general provision on
Standard Assets of a minimum of 0.40 per cent of the value of the asset. In respect of loans extended directly by
insurers to sick units taken over by borrowers falling under the "Standard" classification, the facilities of the

40IRDA/F&I/CIR/INV/196/08/2014 Dt. 14th August 2014

transferee and merged units may continue to be classified separately, for a period not exceeding 24 months
from the date of the takeover of the sick unit, after which the performance of the loans sanctioned to the
borrower as a whole should determine their classification. In cases of reverse merger (i.e., take-over of a healthy
unit by a sick unit) as well, the facilities of both the units may continue to be classified separately for a period of
24 months after which the combined performance may be taken for asset classification.
4. Sub-Standard Asset:
Sub-standard asset is one which has been classified as NPA for a period not exceeding 12 months, e.g., an
asset which has been treated as a NPA on 1st April, 2021, would be treated as a sub-standard asset only up to
31st March 2022. In case of time overrun for completion of project directly financed by insurers, the Boards of
Insurers should decide based on valid grounds, whether the advance should be treated as standard asset. An
asset where the terms of the loan agreement regarding interest and principal have been renegotiated or
rescheduled after commencement of production, should be classified as sub-standard and should remain in this
category for at least two years of continually satisfactory performance under the revised terms. The classification
of an asset should not be upgraded merely as a result of rescheduling, unless there is satisfactory compliance of
the above condition.
5. Doubtful Assets:
A doubtful asset is one which has remained as NPA for a period exceeding 12 months, e.g., a loan facility to a
borrower which is treated as NPA on 1st April 2021, would be treated as 'doubtful' from 1st April, 2022. A loan
classified as doubtful has besides the weakness inherent in that classified as sub-standard, with the continuing
default makes the recovery in full, to be improbable. Here too, as in the case of sub-standard assets,
rescheduling does not lead to upgradation of the category of the asset automatically. Similarly a doubtful asset
which is subject to rehabilitation and where the asset has been subsequently continually satisfactorily serviced
for one year shall be graduated to a standard asset.
6. Loss Assets:
A loss asset is one where loss has been identified by the insurer or its internal or statutory auditors or by IRDAI,
but the amount has not been written off wholly. In other words, such an asset is considered un-collectible and
as such its continuance as a bankable asset is not warranted although there may be some salvage or recovery
value.
7. Overdue Amounts Interest/Principal:

An amount, whether interest or principal is said to be overdue if it is not paid to the insurer on the specified date.
An asset is classified as an NPA if the interest and/ or installment of principal remain overdue for more than 90
days (i.e., one quarter).
b. Provisioning for Loans and Advances:
Taking into account the time lag between an account becoming doubtful of recovery, its recognition as such, the
realization of the security and the erosion in the value of security charged to the insurers, it is necessary that

insurers make adequate provisions against sub-standard assets, doubtful assets and loss assets, as per the
procedure outlined below:
i. Loss Assets: The entire asset should be written off. If the assets are to remain in the books for any
reason, 100 per cent of the outstanding should be provided for.
ii. Doubtful Assets:

a) 100 percent provision of the extent to which the asset is not covered by the realizable value of the
security to which the insurer has a valid recourse and the realizable value is estimated on a
realistic basis.
b) Over and above item (a) above, depending upon the period for which the asset has remained
doubtful, 20% to 100% provision of the secured portion (i.e., estimated realizable value of the
outstanding) should be made on the following basis:
Period for which the Asset has been considered as Doubtful % of Provision
Up to one year 20%
One to three years 30%

More than three years 100%
iii. Sub-Standard Assets:

A general provision of 10% of total value outstanding remaining substandard is required to be made
including loans granted by the Central/State Government. In case of nursing finance granted by an
insurer, the additional loan facilities sanctioned under the rehabilitation programme may be treated as a
separate account and the performance assessed separately. Asset classification and provisioning in
respect of such loan facilities as per the prescribed guidelines may be made only if the interest /principal
payments remain due beyond 90 days.
iv. Default in Repayment of Principal:

On account of various reasons, such as delays in project implementation, getting adequate working
capital facilities, etc., repayment of principal may be delayed beyond the stipulated one quarter. The asset
may continue to be considered as standard if the installments of the principal amount are rescheduled
with the approval of the Board of the concerned insurer. This is subject to the condition that the
rescheduling can be done only once while the interest continues to be paid regularly.
v. Time Overrun: In case of time overrun for completion of project directly financed by insurers, the Board of
Insurer should decide based on valid grounds, whether the advance should be treated as standard asset.
vi. One Time Settlement: Sometimes insurers enter into one-time settlement (OTS) of their dues with a new
owner. In cases where a sick unit has been merged with a healthy and strong unit and where payments

are being made as per the OTS scheme, the asset in respect of the merged unit may be considered as
standard without waiting for a period of 2 years for upgradation from sub-standard to standard asset.
However, such cases should be approved by the Board of the concerned insurer. It is clarified that the
said relaxation is allowed only in OTS cases.
8. In respect of loan facilities extended to sick units (under nursing programmes or otherwise) taken over by
borrowers falling under the “standard” classification, the facilities of the transferee and the merged units may
continue to be classified separately for a period not exceeding 2 years from the date of takeover of the sick unit,
after which the performance of the loan facility sanctioned to the borrower as a whole should determine their
classification.
9. Units enjoying more than one loan facility: In case of borrowers who have been granted more than one loan
facility by the insurer, all the dues from them will have to be treated as NPAs if 50 per cent of its total interest
and/or principal dues from all loans extended to it remain overdue for more than one quarter.
10. Government Guaranteed Loans: Loans or other credit facilities backed by Central/State Government guarantees
should be treated on par with other assets for income recognition and provisioning. However, in respect of loans
backed by Central Government guarantee, such loans shall be treated as NPA only when the Government
repudiates its guarantee when invoked.
11. Income Recognition: Income in respect of any asset classified as NPA shall not be recognized unless realized.
However, any adjustment towards overdue interest against any fresh/additional loan shall not be considered as
realized.
12. Insurers are permitted to participate in Joint Lenders Forum (JLF), formed within RBI Guidelines for loan
accounts which could turn into potential NPAs, and take up need based exposure with the prior approval of the
Insurers Board, which could exceed exposure permitted under IRDAI (Investment) Regulations.
13. The Insurer shall follow the latest RBI Circular / Guidelines issued on the above points, where the provisions of
Master Circular – Investments, are inconsistent with respect to Point 3.7 of this Master Circular on “Income
Recognition, Asset Classification, Provisioning and Other related items”
c. COVID-19 - Rescheduling of Term Loans
Considering the cash flow problems faced by borrowers and to be consistent with RBI’s direction vide Cir.
RBI/20199-20/186 DOR.No.BP.BC.47/21.04.048/2019-20 Dated 27th March, 2020 and Cir: No: RBI/2019-20/244
DOR. No.BP.BC.71/21.04.048/2019-20 Dt. 23rd May, 2020, the following instructions are issued towards
rescheduling of payments towards Term Loans:

a. In Respect of term loans all Insurers are permitted to grant a moratorium of three months towards payment
of all instalments falling due between 1st March, 2020 and 31st August, 2020. The repayment schedule for
such loans and also the residual tenor, will be shifted across the board by three months subsequent to the
moratorium period.
b. Interest shall continue to accrue on the outstanding portion of the term loans during such moratorium period.
c. The asset classification of term loans which are granted relief as per point no. (a), above shall be
determined on the basis of revised due dates and revised repayment schedule.
d. The rescheduling of payments, including interest, will not qualify as a default for the purpose of reporting of
NPAs.
e. Insurers shall frame Board approved policy for the above-mentioned reliefs to all eligible borrowers, by
taking into account various factors including remaining tenure of loan, consortium or non-consortium
lending, repayment capacity etc.
f. Concurrent Auditor in their report for the quarter ending June, 2020 and Sep 2020 shall confirm that the
insurer has complied with the Board Approved policy in granting moratorium.42
3.8 INSURERS BOARD TO DECIDE PRIMARY / SECONDARY EXCHANGE FOR VALUATION OF

SECURITIES
The Board of the insurer, only once, shall select NSE or BSE as the Primary and Secondary exchanges to take
closing price for valuation of Equity Shares. Where the Share is not listed / not traded on the Primary Exchange,
so selected, the closing price available on Secondary Exchange shall be used for valuation. The Concurrent
Auditor shall certify that during the quarter, no change had been made in the exchange based on which the
Equity Shares have been valued.
42 IRDA/F&I/CIR/INV/085/04/2020 Dt.8th April, 2020

4. OPERATIONAL PROCEDURES
1. All Repo transaction shall also be reported to the Investment Committee and Board at least on a Quarterly
periodicity
2. Insurer shall enter into bilateral Reverse Repo/ Repo agreement as per the documentation finalized by FIMMDA.
Such additional clauses may also be inserted in the standard agreement to suit the specific needs of the
Insurance regulatory framework provided such clauses should be more stringent than the standard clauses
provided by FIMMDA.
3. In all other matters such as Accounting Methodology, reporting of trades, settlement of trades, prohibition on
sale of repo security, haircut, valuation etc. related to such Repo and Reverse Repo transactions, Insurers shall
follow the Directions given in notification IDMD.DOD.05/11.08.38/2009-10 Dt. January 8, 2010, issued by RBI
and as updated from time-to-time.
4. The Board of the Insurer shall issue necessary Guidelines in the Investment Policy covering the following:
i. Category of Counterparty
ii. Credit rating of the instruments issued by the Counterparty
iii. Exposure on the Counter party subject to the maximum limits prescribed in this circular
iv. Maximum exposure on the specific Corporate Debt Instrument and the Issuer of such Debt Instrument
v. Tenor of Collateral
vi. Applicable Haircuts
vii. The treatment of ‘downgrading of rating’ during the tenure of repo transaction
4.2 SECURITIES LENDING AND BORROWING FRAMEWORK43
1. Lending securities through SLB in the Funds shall be made only after approval of the Investment Committee.
While considering approval, the Investment Committee shall satisfy that lending securities through SLB will be in
the interest of the Policyholders.
2. The Board of Insurer shall amend its Investment Policy and put in place adequate Risk Management framework
on SLBs covering circumstances for an early recall & rollover, treatment of corporate actions such as dividend,
split, bonus, rights, merger, demerger etc.
4.3 INVESTMENT IN EQUITY SHARES THROUGH IPO44
1. The Board of the Insurers shall empower its Investment Committee to approve Investment in equities through
IPOs, satisfying the above criteria.

44IRDA /CIR/INV/020/2008-09 Dt. 22nd Aug 2008

2. Investment Policy of the insurer shall have a detailed policy in respect of investment in IPOs and the investment
team can take decision on day-to-day basis subject to compliance with the Policy.
3. Such investments shall be subject to periodical review, particularly as to ‘Approved’ status.
4.4 INVESTMENT IN MUTUAL FUND45

The Investment Committee of the Insurer shall lay down proper Guidelines for selection of Mutual Funds and
schemes permissible including exposure Norms to a Single Mutual Fund and to each Scheme of Mutual Fund to
avoid concentration.
4.5 INVESTMENT IN ALTERNATIVE INVESTMENT FUND46
1. The Investment Policy of the insurer shall lay down the policy to invest in Venture funds or Asset management
Company, and the internal norms for such investments shall be decided by the investment committee (IC) of the
Insurer.
4.6 EXPOSURE TO CREDIT DEFAULT SWAPS (CDS)47
1. The Board of the Insurer shall amend its Investment Policy and put in place necessary Risk Management
Framework covering, inter alia, the following:
i. Types of Assets on which Protection can be bought
ii. Counterparties from whom CDS can be bought and limits on the counter parties
iii. Valuation norms
iv. Reporting and monitoring norms
v. Stress testing on the capability of the counterparty to meet the obligation at periodic intervals
vi. Margins applicable (Margins should be in cash or Govt. securities). Such margins collected should be not
part of Investment Assets and Insurer should act as ‘trustee’ of such margins.
vii. Settlement of MTM obligations
viii. MIS, exception reporting
ix. Necessary systems and controls prescribed for User in line with risk management architecture provided in
the aforesaid RBI circular
x. Review of the policy at periodic intervals in line with the Investment policy
2. Insurers shall enter into Master Agreement for CDS with counterparties as issued by FIMMDA. Such
agreements may have additional clauses to suit the specific requirements of the Insurer provided such clauses

46IRDA/CIR/INV/020/2008-09 Dt. 22nd Aug 2008,
IRDA/F&I/Cir/INV/203/2011 Dt. 30th August, 2011 &
IRDA/F&I/INV/CIR/054/03/2013 Dt. March 2013
47IRDA/INV /CIR/247/11/2012 Dt. 27th November 2012

are more stringent than the clauses prescribed by FIMMDA. The Investment Committee should review such
additional clauses on continuous basis.
3. All CDS transactions shall be reported to the Investment Committee, Audit Committee on a quarterly periodicity.
4.7 OUTSOURCING OF INVESTMENT FUNCTION48
1. IRDAI (Investment) Regulations, 2016 makes it mandatory that NO part of Investment Function can be
outsourced, as the same is a core function of the Insurance Business.
2. Engaging a specialist (not an entity falling under the Insurer’s Promoter Group) to provide reports on any class
of investment or a specific investment in a purely advisory capacity will not be considered as outsourcing of a
function of the Insurer, provided the Assets under Management (both Shareholders and Policyholders funds
taken together) of the Insurer is not more than Rs.500 Crores or had not completed one year of operations from
the date of Registration by issue of R3, whichever is earlier, subject to the following conditions:
i. The Investment decisions are made within the Company with proper documentation within the delegated
power as provided in the Investment Policy
ii. Deal placement and execution are done by the Front Office personnel
iii. Periodic reports to Management and Authority are drawn by the Company (in-house)
iv. The Advisory fee to be paid to the Service provider is on a case-to-case basis and not on Net Asset Value
3. The Advisory fee shall:
i. Not form part of NAV calculations in the case of ULIP business

ii. Be paid out of Shareholders funds beyond Solvency Margin
However any such arrangement may only be made with the prior approval of the Authority, giving full details of
the same including any Agreement to be entered into, in this connection.
4.8 TRANSFER OF INVESTMENT49
1. Transfer from Shareholders’ Account to Policyholders’ Account:
Transfer of funds from the Shareholders’ account to the policyholders’ account to meet the Deficit in the
Policyholders’ account in a given financial year, made with the objective of meeting the deficit in the
48IRDA/INV/CIR/020/2008-09 Dt. 22nd Aug 2008

49IRDA/FA/02/10/2003-04 Dt. 29th Oct 2003
IRDA/INC/CIR/006/2003-04 Dt. 15th Dec 2003
IRDA/CIR/F&A/079/Feb-05 Dt. 25th Feb 2005

policyholders’ account, as and when made, should be as per the conservative approach, i.e., at the cost price or
market price, whichever is lower. In case of Debt securities, all transfers are to be carried out at the lower of the
market price and the net amortized cost.
2. Transfer between Policyholders’ Funds:
No transfer of assets (investments) between different policyholders’ funds (between Participating and Non-
Participating funds) shall be allowed. Also, no funds can be transferred between (1) Life Fund excluding
Shareholders Funds (2) Pension & General Annuity Fund and (3) Unit Linked Funds
3. Purchase/sale transactions between Unit linked funds:
Insurers may like to consider sale/purchase transactions between unit linked funds as part of investment
management strategy, to limit transactions cost and also arising out of options exercised by the policyholders to
shift between different unit linked funds. The sale/purchase of investments under such circumstances would be
based on the market price of the investments, which are being shifted between unit-linked schemes. ALL such
transactions should be made at a price as specified below:
a. In case of equity, preference shares, ETFs and Government Securities market price of the latest trade.
Deal should be entered into the system within one hour of taking such quote or price
b. In case of securities mentioned in (a) if the trade has not taken place on the day of transfer and for all other
securities not part of (a) previous day valuation price.
4. The Concurrent Auditor shall confirm that all transaction as said in point 3 above, have been done as per the
time lines specified in point 3 above.
5. Funds of Non-linked business: It is reiterated that no sale/purchase is permitted between the various
policyholders’ funds under the non-linked business
4.9 OTHER INVESTMENTS IN PENSION AND GROUP FUND
Where a security, being part of ‘Approved Investment’, at the time of acquisition, subsequently, due to non-
fulfilment of regulatory criteria for Approved Investments, becomes a part of ‘Other Investments’, the insurer,
shall ensure such security is not continued to be part of the Pension and Group fund, within a period of 90 days.
If the security continues to be ‘Other Investments’, after expiry of 90 days, the value of such security shall be
made good by transfer to Shareholders funds, at amortized cost
4.10 TRANSACTIONS ON STOCK MARKETS TO BE ON CASH BASIS50
1. The Authority stipulates that all transactions entered into by insurers on the stock markets shall result in delivery.
All insurers are required to place the contents of this Circular before their respective Boards and Investment
50IRDA/CIR/INV/062/JAN/05 Dt. 17th Jan 2005

Committees, and a copy of the duly certified resolution confirming the directive of the Authority is required to be
filed with the Authority.
2. Further, all insurers are required to file a certificate of compliance to this effect on a quarterly basis. The
Certificate is required to form part of FORM 5 of the Return on “Statement of Investment Reconciliation” filed by
the insurers under the IRDA (Investment) Regulations, 2016. The Certificate of Compliance to be filed with the
said Return now stands modified and shall henceforth read as under:
3. “Certified that all cash market transactions executed on the stock exchanges are only on delivery basis. Further
certified that all information given herein is correct and complete to the best of my knowledge and belief and
nothing has been concealed or suppressed.”
4.11 NEGOTIATED DEALING SYSTEM – ORDER MATCHING (NDS – OM)51
1. The Insurance Act, 1938 requires a Life Insurer to invest his Controlled funds as per Section 27A and a General
Insurer to invest his Total Assets as per Section 27B in ‘Approved Investments’. The Act further requires a Life
Insurer to hold not less than 50% and a General Insurer to hold a minimum of 30% in Approved Securities,
which includes investment in Government of India Securities.
2. Reserve Bank of India, has operationalised Negotiated Dealing System – Order Matching (NDS-OM) Module
from Aug, 2005 with the following broad features:
i. The system is purely order driven with all orders being matched based on strict price / time priority.
ii. The system is an anonymous order matching system wherein identify of parties are not revealed. The
Clearing Corporation of India Limited (CCIL) will become the central counterparty to each trade done on
the system.
iii. The system allows straight- through processing (STP) and trades executed will flow straight to CCIL in a
ready for settlement stage.
iv. The system provides functionalities for order management (placing, modifying or cancelling orders), trade
related queries, activity log, market information and analytics (YTM computation etc.)
v. The system, presently, supports dealing in all Central Government and State Government securities for
T+1 settlement. The system will be further upgraded later to facilitate trading in discounted instruments
like Treasury Bills.
3. All secondary market trading in Government Securities shall be placed via NDS-OM only.
51IRDA/INV/CIR /029/2005-06 Dt. 21st Nov 2005

4.12 REPORTING OF OTC TRANSACTIONS IN CERTIFICATES OF DEPOSITS (CDs) AND
COMMERCIAL PAPERS (CPs)52
1. In order to ensure transparency in secondary market transactions and obtain information on actual trades in CDs
and CPs, which are money market instruments, all insurers are advised to report their OTC trades in CDs and
CPs on the FIMMDA reporting platform.
2. Accordingly, beginning 1st August 2010, all IRDAI regulated entities shall report their OTC transactions in CDs
and CPs on the FIMMDA reporting platform within 15 minutes of the trade for online dissemination of market
information. Detailed procedure in this regard would be advised by FIMMDA.
4.13 ISSUE OF LONG TERM BONDS BY BANKS – FINANCING OF INFRASTRUCTURE AND

AFFORDABLE HOUSING53
Investment Committee shall ensure to have robust mechanism on classification of such investment to qualify as
Infrastructure or Housing Sector exposure considering predominant objectives of the offer.
4.14 REPORTING OF TRANSACTIONS IN CORPORATE BONDS, COMMERCIAL PAPERS,

CERTIFICATE OF DEPOSITS & SECURITISED DEBT54
1. All Insurers to report their secondary market OTC trades in Corporate Bonds and Securitized Debt Instruments
as per the reporting requirements on any of the stock exchanges (NSE, BSE and MCX-SX). These trades are to
be cleared and settled through any of the clearing corporations (NSCCL, ICCL and MCX-SX CCL).
2. All Insurers to report their secondary market OTC trades in Commercial Papers and Certificate of Deposits as
per the reporting requirements on FIMMDA (CBRICS)
4.15 ULIP FUND CLEARANCE PROCEDURE AND NAV PROCESS
a. IRDAI ULIP Fund Clearance Procedure
1. All Life Insurers shall get their new ‘Fund(s)’ cleared by the Investment Department of IRDAI. For every new
product filed with IRDAI, as a part of File & Use, the Life Insurer shall in “duplicate” file with IRDAI, the Certificate
signed by the Appointed Actuary (AA), Chief Investment Officer (CIO) Chief Risk Officer (CRO)and Chief
Financial Officer (CFO) along with the following:
52IRDA/F&I/CIR/INV/115/07/2010 Dt. 21st July 2010

54IRDA/F&I/CIR/INV/099/03/2014 Dt. 28th Mar 2014

i. ‘Investment Policy’ of each segregated fund as part of file & use procedure, under Section 8.1 of Form
IRDAI-Life-Linked-NP. The Appointed Actuary shall, as a part of the product filing, confirm that the
Investment policy fully complies with IRDAI (Investment) Regulations, Circulars and Guidelines issued
there under.
ii. SFIN shall be derived following the procedure mentioned below:
No Fund Category Procedure for ‘SFIN’

1 Unit Linked Individual Funds <ULIF>+<001>+<ddmmyy>+<FundName>+<Reg.No>
2 Unit Linked Group Funds <ULGF>+<001>+<ddmmyy>+<Fund Name>+<Reg.No>
Note: Explanation to ‘Procedure for SFIN’

a. The 1st four Character of SFIN denote the Category to which the Fund belongs
b. 001 denote the 1st fund in the particular Category
c. ddmmyy refers to the date of launch of fund
d. Fund Name denotes the Name of the fund, which shall be abbreviated to 10 Characters
iii. The insurer shall confirm that the SFIN is unique and has not been allotted to any other segregated fund.
iv. Reg. No is the Registration Number of the Insurer and other details as required in Format 1 for the new
fund to be launched. If any “group of cat code head” as a permissible asset class is subsequently added /
removed by the Authority, the insurer shall separately file the same for IRDAI’s prior clearance, for ‘each’
fund where the “group of cat code head” would be offered.
v. While filing the information mentioned in point 4.15(a)(1) above the Appointed Actuary (AA), Chief
Investment Officer (CIO), Chief Financial Officer (CFO) and the Chief Risk Officer (CRO) shall certify the
following:
1. The ‘Segregated Fund’, by whatever name called, would invest only in the ‘exhaustive’ Categories of
Investments permitted under guidelines issued under IRDAI (Investment) Regulations, 2016
2. The Investments to be made as per the Investment Policy, as specified in Section 8.1 of Form IRDAI-
Life-Linked-NP, of File & Use procedure] would be covered in the Standard Operating Procedure
(SOP), approved by the Investment Committee of the Insurer and followed by the Investment
Department of the Insurer, before the launch of the fund, if existing SOP does not cover the new
asset class, if any. The ‘Segregated fund’ would have identifiable, individual ‘Scrips’, grouped as per
guidelines issued by IRDAI and the same would be identifiable at custodian level, by a separate sub
code, for such ‘Segregated Fund.
2. Other Conditions:
a. No individual security is earmarked between two or more ‘segregated fund’

b. The New Fund offered by the Insurer shall not be a minor modification of any of its existing Fund.
c. The name of the Fund shall not be misleading and shall not contain word(s) that can convey an
impression incongruous to the objective of the Fund.
d. Each ‘Segregated Fund’ would have a ‘single’ NAV, declared on a ‘day-to-day’ basis and uploaded in
the Insurer’s Public Domain and in the Life Insurance Council Website
e. The insurer, through a portal, would enable the policyholder to know, through a secured login (i) the
value of policy wise units held by him, as per FORM D02 and (ii) fund wise NAV (SFIN wise) on both
the Insurer’s website and life council website on the same day
f. The Insurer, as a part of product brochure, had included the disclosure mandated under FORM D02
and would provide the secured login details to Policyholders along with the Policy document
g. The ‘Units’ would be created on a ‘day-to-day’ basis and would be backed by Investment assets, for
the ‘segregated fund’
h. The Investment Trial Balance, in respect of each ‘Segregated Fund’ [with clear link to SFIN] shall be
generated through the system.
i. All prudential and Exposure norms as per Regulation 9 of IRDAI (Investment) Regulations, 2016
amended from time to time shall be complied at each 'segregated' fund, as well as at Assets under
Management (AUM) of ULIP.
j. Fund Management Charges (FMC) is identified with respect to each ‘segregate fund’ and not
otherwise.
k. Transfer of funds between ULIP funds shall be done as per the norms laid in point 4.8 (3) of the
Master Circular. The Concurrent Auditor shall certify that the Insurer has the required automated
System in place to ensure compliance of this requirement.
l. The SFIN would be quoted in all ‘Fund’ related filing / disclosure. Also SFIN would be mentioned in
all documents and all fund-wise information provided to policyholders, other users (public, distribution
channels and others) and on all returns or fund related correspondence with the Authority
m. The Insurer shall file a certificate issued by the Chartered Accountant appointed for certification of
Systems and Process in place as per the Guidance Note issued in “Investment Risk Management
Systems and Process of Insurance Companies” by The Institute of Chartered Accountants of India.
The latest copy of such certificate shall be filed along with the product filed for approval, as a part of
file & use.
3. All records in this regard shall be made available for the inspection by IRDAI at any point of time.

b. NAV Process
1. The NAV Process to be followed for new and existing funds and Systems and Process should be in place for
calculation of NAV for ‘each’ Segregated Fund.
2. The objective of defining the ‘Net Asset Value (NAV) Process’ for the ULIP Funds, is to standardise the process
to be followed by all Life Insurers in arriving at the NAV per Unit. Every Insurer in computing and declaring the
NAV shall follow the below mention procedure consistently
A. Methodology of operating ‘Segregated Fund’

B. ‘Units’ creation / Redemption
C. Preparation of Daily cash flow statement
D. Security Master Creation
E. Primary Market deals / IPO
F. Secondary Market Debt / Equity deal authorization
G. Settlement Process
H. Banking Transaction
I. Corporate Actions
J. Valuation Process
K. Charges
L. NAV Computation
3. In this regard the Investment Committee of the insurer shall amend the Standard Operating Procedure (SOP) to
include clear internal guidelines, process flow charts, procedures and responsibilities to be followed by the
insurer. The following are the minimum set of guidelines to be adhered in this regard:
A. Methodology of Operating ‘Segregated Fund’
1. Regulation 3(w) of IRDAI (Unit Linked Insurance Products) Regulations, 2019 defines ‘Segregated Funds’ as
‘Funds earmarked in respect of Linked Business’.
2. To comply with the above requirements of ‘Segregated Fund’, the Insurer shall adopt the following procedure to
ensure strict segregation of funds and computation of NAV:
a. The Insurer shall, shall open separate bank account and account with the Custodian for each “segregated
fund”.
b. The Bank shall be directed to allot an Account Number/Account Name with specific reference to the
particular "Segregated Fund" so as to match the 10 digit fund name of the SFIN.
c. Every Purchase, Sale of Investment, Income on Investment (including Corporate Action) shall be identified
with reference to the particular ‘Segregated Fund’ and accounted for.

d. Every ‘Deal Slip’ shall be identified with reference to the ‘segregated fund’ along with ‘Segregated Fund
Identification Number “SFIN” for such Segregated Fund(s) and the respective ‘sub-code’ of Custodian and
the respective Bank Account.
3. Passive breach of regulatory limits, under any fund [SFIN] on any day, if corrected within three business days,
ALL such corrective actions taken shall be reported by the Concurrent Auditor to the Audit Committee
B. Units Creation / Redemption
Unit capital movement tracks the capital movement (subscription and redemption) in the funds and requires
reconciliation with Policy Admin System (PAS), which requires
a. Daily Report of ‘Subscription & Redemptions’ received from the Policy Admin System (PAS) to be uploaded
[without manual intervention through process integration] in the Investment Accounting System
b. Unit Report shall be reconciled with the Investment Accounting System’s Creation / Redemption Report, after
booking of unit capital entries
c. Units created on a ‘day-to-day’ basis (including switches), shall be backed by ‘segregated fund wise’ Investment
assets. In other words, the value / amount for which Units are created for the particular day (at the prevailing
NAV, applicable for the day, of the respective fund), should be equivalent to the premium receipt (net of
switches) less applicable charges and other outflows such as benefits paid, surrenders and foreclosures in
excluding applicable charges of the ‘respective segregated fund’.
C. Preparation of Daily Cash Flow Statement
The insurer shall prepare a cash flow statement for each ‘Segregated Fund’ on a day-to-day basis to ascertain the
‘investible funds’. The preparation of the cash flow statement shall take into account the following:
1. Opening Bank balance at the Start of the Day (Closing Balance of the Previous Day)
2. Receipt on account of Sale of Investments
3. Receipt on account of Redemption of investment or Maturity of investments (Gross)
4. Receipt of Interest or Dividend etc.,
5. Payments on account of purchase of Security
6. Payments on account of Application Money
7. Premiums received net of charges and redemptions
8. Any other receipts or payments pertaining to investments
D. Security Master Creation
1. Equity Investments
Based on the inputs from treasury the investment back-office shall create Security Masters in the system (linked via
NSE/BSE codes) and the same shall be validated by the Mid-Office. The procedure includes documentation of
supporting and supervisory sign off

2. Debt Investments
Security masters for debt Instruments are prepared on the basis of Information memorandum in case of primary and
secondary market deals by the Back Office. The procedure includes documentation of supporting and supervisory
sign off.
E. Primary Market Deals / IPO
1. Booking of Primary Market Deals - Debt

Primary Market Deals shall be booked on the date of application and on the date of allotment the Securities will be
reflected in the Investment Accounts
2. Booking of Equity IPO

Equity Investments shall be accounted on the date of application for IPO Issue as ‘Application Money’ at the
segregate Fund Level and on the date of allotment the allotted Shares shall be reflected in the Investment accounts
in the same proportion of application money.
F. Secondary Market Debt / Equity Deal Authorization
1. Debt Deals
All Debt securities as categorised in Guidelines on Categories of Investments, as amended from time to
time, shall be executed with counterparties and reported on NSE / BSE / FIMMDA reporting platform and
the same shall be confirmed with counterparties. The deals shall be authorised in the investment system
and the trade files / information shall be sent to custodian / other online settlement systems as recognised
by any financial regulator for settlement.
2. Equity Deals
a. STP (Straight Through Process) Reconciliation:

All Secondary Market equity deals shall be put through the STP module in the investment system. The
dealer shall put through the deal in the investment system after concluding the transaction. The deal
would then flow to the back office which would be compared with the input details and the STP file
received from broker. If all details match, the transaction would be authorised in the system for settlement.
b. Custodian /Broker settlement:

After STP reconciliation the equity trade files ISO files shall be sent to custodian and broker houses
through STP. All deals shall be recorded on trade date accounting basis.
G. Settlement Process
As specified by SEBI / Clearing Houses.

H. Banking Transactions
1. Coupon Payments for Debt Investments

Interest receipt entries shall be passed in Bank (Reconciled with Custodian Corporate Actions Report / other
online settlement systems as recognised by any financial regulator)
2. Redemptions/Maturities for Debt Investments
Redemptions/Maturity receipt entries shall be passed in bank account (Reconciled with Custody Corporate
Actions report).
3. Dividend Receipts for Equity Investments
Dividend receivables shall be received in bank on the receipt date (Reconciled with Corporate Action Report
received from the Custodian or other online settlement systems as recognised by any financial regulator)
4. Management Fees
Payment entries pertaining to Management fee transfer to Non-Linked Funds shall be passed in Bank accounts
on respective payment dates.
5. Booking of Application Money
Application Money shall be booked in current asset account on the date of payment of application money
towards prospective investments.
I. Corporate Actions
1. Equity
The insurer shall obtain details of corporate action from exchange(s) on which the stock is listed or custodian or
any service provider who disseminates such information. While the information pertaining to corporate actions
may be obtained from any service provider, it may be noted that it is duty of the insurer to have adequate
internal controls in place to ensure that all corporate actions are duly acted upon.
2. Debt
The insurer shall configure their Investment System for details of interest receivable and redemption dates.
Further, details of interest receivable and redemption can also be obtained from the custodian / other online
settlement systems as recognised by any financial regulator.
3. Accounting of coupon payments, redemption / maturities for debt investments shall be automatically triggered by
the system, based on the interest payment dates and maturity dates defined in the security masters created for
‘each’ security.
J. Valuation Process
1. Valuation of securities shall be in line with Annexure II of Master Circular – Investments

2. The Insurer shall close the Investment Front Office system for transactions at 6.00 PM. The Concurrent Auditor
shall confirm the compliance of this requirement in their quarterly report to the Board of Directors
K. Charges:
1. Fund Management Charges

Fund Management Charges (FMC) including GST shall be ‘accounted’ for on a day-to-day basis in the
investment accounting system. The actual transfer to “UL-Non-Unit Reserve or Non-Linked Funds” account of
accumulated FMC shall be done at least monthly or at lesser frequency
2. FMC charged on the segregated fund [SFIN], where investment is made in Mutual funds and Exchange Traded
Fund, permitted by IRDAI, shall be subject to:
a. The FMC levied shall be the FMC as per the F&U of the segregated fund (SFIN) reduced by FMC charged
by the Mutual Fund / Exchange Traded Fund
b. Point (a) above, shall be permitted provided; the insurer has a fully Automated System to compute the
differential FMC as detailed in point (a) above.
c. The Concurrent Auditor shall certify the Systems in place, to comply with the requirement of this provision,
before the Insurer could avail this provision
3. Dealing costs
Dealing costs securities transaction tax and service tax shall be adjusted in the cost of investments
L. NAV Computation
1. NAV: The NAV of the Segregated FUND [SFIN] shall be computed as:
Market Value of investment held by the fund + Value of Current Assets – Value of Current Liabilities &
Provisions, if any
Number of Units existing on Valuation Date (before creation / redemption of Units)

2. The NAV computed as above, in respect of ‘each’ Segregated Fund, shall be Audited by the Concurrent Auditor
on a day-to-day basis.
3. The NAV calculated as above, in respect of ‘each’ Segregated fund, shall be declared on the Insurer’s Website
and at the Life Insurers Council Website, as and when the same is ready. The following notes shall be
considered for the computation of NAV
a. Market value of investment, held by the fund shall be as explained above in the valuation of investments
section and the same netted off for FMC
b. Value of Current Assets represents Accrued interest, Dividend Receivable, Bank Balance, Receivable for
Sale of Investments and Other Current Assets (for Investments)
c. Value of current liabilities represents Payable for Investments
d. Number of units derived from the investment accounting system shall be reconciled on a day to day basis
with the policy admin system
e. Provisions shall include expenses for brokerage and transaction cost, NPA, Fund Management Charges
(FMC) and any other charges approved by the Authority
4. Specifying SFIN in short message services (SMS), tele-callings, radio messages and ATM display

It is clarified that, SFIN need not be displayed in fund related communication through SMS, tele-calling, radio
messages and ATM display due to technology limitations. It would be full compliance of IRDAI’s direction, if
Insurers specify SFIN in all documents and all fund-wise information provided to policyholders and other users
5. Segregated funds having multiple plans, with different FMCs attached to it or running ‘Funds of Funds’ structure
As each ‘Segregated Fund’ is required to have a ‘single’ NAV, declared on a ‘day-to-day’ basis and FMC is
required to be identified to each segregated fund, all Insurers are required to convert various plans offered below
a fund or funds of funds structure, as individual segregated fund with a SFIN with identified ‘scrips’ representing
the investments of such segregated funds. In doing so, the net asset value (NAV) of each plan shall be
segregated from the underlying fund. The Internal / Concurrent Auditor shall certify that such segregation had
not resulted in enrichment of one set of policyholders from others due to change in the units or the NAV. The
implication, to the policyholder of such change, if any, shall be put on the insurer’s website, along with the
rationale of making such change. The concurrent Auditor shall confirm the Insurer’s adherence to these
requirements.
6. Assigning SFIN for ‘new’ funds launched
The Authority had mandated to specify the date of launch for each new Segregated Fund in the File & Use
procedure. In this connection it is clarified that the date refers to the date on which such product is filed with
IRDAI.
7. Operating CSGL / CBLO Account
As RBI do not permit Banks to open multiple CSGL / SGL accounts against single entity the Insurers are
permitted to operate with a single CSGL /SGL Account and allocate the holdings in their books to each
Segregated Fund [SFIN]. All insurers are required to reconcile their Government Securities holding across all
segregated funds on a day to day basis.
Similarly as CCIL permits opening only one CBLO Account for every company, the Insurers are hereby
permitted to have a common CBLO Account at company level, and reconcile their holdings in CBLO, segregated
fund wise, on a day to day basis.
The Internal / Concurrent Auditor, in his Audit Report to the Audit Committee of the Insurer’s Board shall confirm
that the Insurer had done the reconciliation of G Sec and CBLO holding, segregated fund wise [SFIN] on a day-
to-day basis.
8. Usage of valuation matrix published by FIMMDA
The guiding principle shall be to follow, for all instruments, the day-to-day valuation matrix published by FIMMDA
and where ever FIMMDA does not provide such valuation matrix on a day to day basis, the Insurer may adopt

valuation matrix provided by any SEBI registered Rating Agency, till such time FIMMDA comes out with such
valuation matrix and provides the same in the technology platform, as mandated by the Authority in eliminating
manual intervention. The Concurrent Auditor shall certify in his Audit Report to the Board that the Insurer had
consistently adopted the methodology prescribed above during the audit period.
4.16 IMPLEMENTING RFQ PLATFORM FOR INVESTMENTS IN CORPORATE BONDS /

COMMERCIAL PAPERS55
1. With a view to enhance and coalescing the fragmented liquidity in Corporate Bonds, SEBI has implemented
Request for Quote (RFQ) Platform through Bombay Stock Exchange (BSE) and National Stock Exchange
(NSE). The RFQ platform seeks to replicate the OTC market albeit on an electronic platform in a move to bring
more transparency, centralization in protecting investor interest apart from having enough liquidity in Secondary
Market.
2. To achieve the above, SEBI, vide Circular: SEBI/HO/IMD/DF3/CIR/P/2020/130 Dated 22nd July, 2020 has
mandated all Mutual Funds (MFs) to undertake 10% of their total Secondary Market trades of Corporates Bonds
through RFQ to start with. As this is likely to bring transparency and liquidity in the Corporate Bond segment, the
Authority, in consultation with the Life and General Insurance Councils directs all Insurers as follows:
a. On monthly basis, the Insurers shall undertake at least 10% of their total Secondary Market trades in the
Corporate Bonds in Value place / seek Quotes through one-to-many mode on RFQ platform available on
BSE/NSE. The 10% limit shall be reckoned on the average of Secondary Market Trades by Value, in the
immediately preceding 3 months on rolling basis.
b. Concurrent Auditor of the Insurer in his Quarterly Audit Report shall confirm that the Insurer has complied
with the directions of this Circular.
3. The above procedure will be followed by all Insurers with effect from 1st Nov, 2020.
4.17 CONTROL & MONITORING MECHANISM OF INVESTMENT OPERATIONS – WORK FROM

REMOTE LOCATION56
With response to the IRDAI communication Dt. 28th April, 2021 on Work from Remote Location, the Insurers have
provided feedback on the status of minimum Cyber Security Controls put in place by the Insurers. A scrutiny of the
feedback showed inconsistency in controls & monitoring of work from remote location. In this regard, the Insurers are
advised as follows:
55 IRDAI/F&I/CIR/INV/246/09/2020 Dt. 25th Sep, 2020

56 IRDAI/INV/001/2021 Dt.18th June, 2021

1. Insurers shall have in place prudent cyber security norms, proper systems and controls while
allowing/continuing conduct of Investment Operations from remote location.
2. These systems and controls should take care of Data Privacy, Security and Confidentiality, possibility of
Cyber-Attacks, Hackings, Malware Infections, Disruption Risks, Recording of Deals and Supervisory
Controls of the dealing activities.

5. DISCLOSURES AND REPORTING NORMS
The following disclosures should be made by the Insurers in the Notes on Annual Accounts to the balance sheet:
Minimum Maximum Daily average

Outstanding as
Particulars outstanding during outstanding outstanding during
on March 31
the year during the year the year
Securities Sold under repo
1. Government Securities
2. Corporate Debt Securities
Securities purchased under

reverse repo
1. Government Securities
2. Corporate Debt Securities
5.2 SECURITIES LENDING AND BORROWING FRAMEWORK57
1. The securities lent shall continue to be shown in Form 5 as they were shown prior to SLB transaction. Income
earned on lending securities shall be shown in the CAT Code that is applicable as it appears in Form 1. The
Securities which are lent through SLB and are not held in custody shall be shown in Form 6 under the column
‘others’ along with a reconciliation statement with the following details (to be part of FORM 6 and filed as a part
of periodical returns):
a. Name of the scrip

b. No. of securities lent
c. Name of the fund
d. Maximum limit permissible in such fund based on the total quantity held
e. Stock Exchange
f. Date of expiry of the contract
g. Value of the securities lent as on the date

5.3 INVESTMENT IN CREDIT DEFAULT SWAPS58
Insurer shall file quarterly report on the CDS transactions in the format prescribed below:
Name of the Insurer

Quarter - Year
1. Details of CDS, counter party wise
Name of the Tenor of

Tenor FV of the Notional Spread Net
No Counter the Margin Held
of CDS underlying Amount (bps) Position
Party underlying
2. Details of CDS, reference entity wise
Name of
Tenor Tenor of
the FV of the Notional Spread Net Margin Approved/
No of the
reference underlying Amount (bps) Position Held Other Inv.
CDS underlying
entity
3. Details of reference assets wherein credit event occurred and status of fulfillment of commitment by the Market
Maker.
5.4 EXPOSURE TO INTEREST RATE DERIVATIVES59
1. The presentation in the financial statements and disclosures are governed by AS 31 and 32 issued by ICAI. In
specific, the Insurer have to make the following disclosures in the Financial statements:
i. Description of Participant’s financial risk management objective and policies, in particular its policy for
hedging forecasted transactions.
ii. Hedging strategy.
iii. Accounting Policy for Derivatives.
iv. Nature and terms of outstanding Interest Rate derivative contracts.
v. Quantification of the losses which would be incurred if counter-parties failed to fulfil their obligation under
the outstanding Interest Rate derivative contracts.
2. Quarterly report shall be submitted to the Authority as per Annexure A, if the Insurer undertakes any Interest
Rate Derivatives
58IRDA/INV /CIR/247/11/2012 Dt. 27th November 2012


Annexure A
Name of the Insurer

Quarter- Year
1) Details of Rupee Interest Rate Derivatives, Counter party wise
Hedge
Face PV01 of
Nature of the Notional Designation
Name of Mark to Unsettled Value of the
No derivative Tenor of Amount of (Cash-flow / PV01 of
the Market MTM Nature of Tenor of the the Underlying
contract derivative the Reinvestme the derivative
Counter- (Profit (Profit underlying underlying underlying being
(FRA/ IRS/ contract derivative nt / interest (bps)
party /loss) /loss) , if hedged
IRF) contract income
applicable (bps)
receivable)
2) Counterparty-wise Credit Exposure to Derivative Transactions:

Notional Value of Outstanding Current Credit Potential Future Value of
No. Counterparty CSA posting limit Type of Collateral
Derivative contracts Exposure Credit Exposure Collateral
3) Fund wise Notional Value of Outstanding derivative transactions and the Book Value of investments
Expected Cash Flows on

Notional outstanding Book Value of Percentage of Notional outstanding on the
Fund Name underwritten Insurance Remarks
derivative transactions investments Book Value of Investments
Contracts
Total
4) Benchmark-wise derivative activity during the quarter :
Notional Amount of
Fresh derivative Derivative contracts/ positions Notional Amount of derivative
Nature of the derivative contracts
No. Benchmark contracts/ positions terminated/ matured/ expired contracts Outstanding
derivative contract Outstanding at the
taken during the quarter during the quarter at the end of the quarter
beginning of the quarter
FRA MIBOR/ OIS
FRA INBMK
IRS MIBOR/ OIS
IRS INBMK
IRF GOI

5.5 ISSUE OF LONG TERM BONDS BY BANKS – FINANCING OF INFRASTRUCTURE AND
AFFORDABLE HOUSING60
While preparing Exposure to Industry sector i.e. Form 4A- Part D, the Investments under ILBI and IOLB shall be
classified under’ Infrastructure - Long Term Bonds –BFSI’ and HLBH and HOLB shall be classified under
‘Housing – Long Term Bonds- BFSI’
5.6 ULIP PERIODICAL DISCLOSURE
1. Every life Insurer shall at least on a monthly periodicity, on or before the 5th of the succeeding month, make
the following portfolio disclosures [SFIN wise]in the Insurers website:
a.
Name of the fund
b.
SFIN Number
c.
Investment Objective of the Fund
d.
NAV as on the last business day of the month
e.
All NAV shall be upto 4 decimals
f.
AUM of Equity and Debt as on the last business day of the month
g.
Benchmark as approved by the Investment Committee
h.
Name of the Fund Manager
i.
Number of Funds managed by Fund Manager (in point ‘g’ above) along with details of Equity, Debt and
Balanced Funds
j. Asset Allocation provided in Product document (as per file & use procedure) and percentage of Actual Asset
Allocation at the end of the respective month
k. Rating Profile of Debt Instruments
l. Modified Duration of the Debt and Money Market Instruments
m. Exposure of SFIN (debt and equity) to top 10 industrial sectors as defined under National Industrial
Classification 2008 and balance exposure to be shown under “others”
n. Performance of the fund over different period over 1 month, 6 months, 1 year, 2 year,3 year and since
inception along with the performance against the Benchmark index for the corresponding period. Returns
less than or upto 1 year, shall be based on absolute returns
o. The TOP 10 holdings under each Asset Category of G .Sec, Corporate Debt and Equity shall be disclosed.
The exposure to the Money Market instruments to be disclosed as a consolidated amount and as
percentage to AUM of the SFIN
p. The Debt and Equity holdings shall be disclosed as a percentage to the AUM of the SFIN in the statement
of portfolio. The total percentage of holdings shall be totalled to 100% of the AUM of the SFIN
2. The Concurrent Auditor shall, in his Audit Report, confirm compliance to the above points.

5.7 EXPOSURE TO COMPANIES PARTICIPATING IN JLF
Insurers shall file, along with Quarterly Periodical Returns to IRDAI the information, as under. Also, Insurers shall
make necessary disclosure in Notes to Accounts of Financial Statements.
Comments of
Date of Exposure as Additional % of exposure Date of
Board on
Name of Insurers on the date of Exposure as in excess of Approval by
No Additional
the Entity entry into Insurers entry decided in IRDAI (Inv) the Insurers
Exposure
JLF into JLF JLF Regulations Board
permitted
Page 62 of 100
6. FUND CLEARANCE FORMATS & INVESTMENT CATEGORY CODES
6.1 Asset Categories Sheet:

a. For Existing Segregated Funds
FORMAT 1
INVESTMENTS MADE - EXISTING SEGREGATED FUND

Name of the Fund:
…………………… Ass
SFIN No: …………………… et
……. Cate
IRDA gory
Approval Ref Nam
CAT
No INVESTMENT CATEGORY HEADS No: e as
CODE
Date of per
Launch of dd/mm/yy F&U
Fund (Act
Amount (Rs. urial
Crores) )
A CENTRAL GOVT. SECURITIES
A01 Central Government Bonds CGSB
A02 Special Deposits CSPD
A03 Deposit under Section 7 of Insurance Act, 1938 CDSS
A04 Treasury Bills CTRB
CENTRAL GOVT. SEC, STATE GOVT OR
B
OTHER APPROVED SECURITIES
B01 Central Government Guaranteed Loans / Bonds CGSL
B02 State Government Bonds SGGB
B03 State Government Guaranteed Loans SGGL
Other Approved Securities (excluding
B04 SGOA
Infrastructure Investments)
B05 Guaranteed Equity SGGE
(a) HOUSING & LOANS TO STATE GOVT FOR
C
HOUSING / FFE
C01 Loans to State Government for Housing HLSH
Loans to State Government for Fire Fighting
C02 HLSF
Equipment
Term Loan - HUDCO / NHB / Institutions
C03 HTLH
accredited by NHB
Commercial Papers - NHB / Institutions
C04 HTLN
accredited by NHB
Page 63 of 100
C05 Housing - Securitised Assets HMBS
C06 Debentures/Bonds/CPs/Loans - Promoter Group HDPG
Long Term Bank Bonds Approved Investment -
C07 HLBH
Affordable Housing
TAXABLE BONDS
C08 Bonds / Debentures issued by HUDCO HTHD
Bonds / Debentures issued by NHB / Institutions
C09 HTDN
accredited by NHB
Bonds / Debentures issued by Authority
constituted under any Housing / Building Scheme
C10 HTDA
approved by Central / State / any Authority or
Body constituted by Central / State Act
TAX FREE BONDS
C11 Bonds / Debentures issued by HUDCO HFHD

Bonds / Debentures issued by NHB / Institutions
C12 HFDN
accredited by NHB
Bonds / Debentures issued by Authority
constituted under any Housing / Building Scheme
C13 HFDA
approved by Central / State / any Authority or
Body constituted by Central / State Act
(b) OTHER INVESTMENTS (HOUSING)
C14 Debentures / Bonds / CPs / Loans HODS

C15 Housing - Securitised Assets HOMB
Debentures / Bonds / CPs / Loans - (Promoter
C16 HOPG
Group)
Long Term Bank Bonds Other Investment–
C17 HOLB
Affordable Housing
Reclassified Approved Investments - Debt (Point
C18 HORD
6 under Note for Regulation 4 to 9)
(c) INFRASTRUCTURE INVESTMENTS
C19 Infrastructure - Other Approved Securities ISAS
C20 Infrastructure - PSU - Equity shares - Quoted ITPE
Infrastructure - Corporate Securities - Equity
C21 ITCE
shares-Quoted
C22 Infrastructure - Equity (Promoter Group) IEPG
C23 Infrastructure - Securitised Assets IESA
Infrastructure - Debentures / Bonds / CPs / loans
C24 IDPG
- (Promoter Group)
C25 Infrastructure - Infrastructure Development Fund IDDF
Page 64 of 100
(IDF)
Onshore Rupee Bonds issued by ADB and IFC
C26 IORB
(Infrastructure- approved)
Long Term Bank Bonds Approved Investment–
C27 ILBI
Infrastructure
Infrastructure Investments rated not less than “A”
C28 IELB
along with Rating of “EL1”
Debt Instruments of InvITs - Approved
C29 IDIT
Investments
TAXABLE BONDS
C30 Infrastructure - PSU - Debentures / Bonds IPTD
C31 Infrastructure - PSU - CPs IPCP
Infrastructure - Other Corporate Securities -
C32 ICTD
Debentures/ Bonds
C33 Infrastructure - Other Corporate Securities - CPs ICCP
C34 Infrastructure - Term Loans (with Charge) ILWC
TAX FREE BONDS
C35 Infrastructure - PSU - Debentures / Bonds IPFD
Infrastructure - Other Corporate Securities -
C36 ICFD
Debentures/ Bonds
(d) INFRASTRUCTURE - OTHER

INVESTMENTS
C37 Infrastructure - Equity (including unlisted) IOEQ

C38 Infrastructure - Debentures / Bonds / CPs / loans IODS
C39 Infrastructure - Securitised Assets IOSA
C40 Infrastructure - Equity (Promoter Group) IOPE
Infrastructure - Debentures / Bonds / CPs / loans
C41 IOPD
- (Promoter Group)
C42 IOOB
(Infrastructure- others)
Long Term Bank Bonds Other Investment–
C43 IOLB
Infrastructure
C44 IORD
Reclassified Approved Investments - Equity
C45 IORE
(Point 6 under Note for Regulation 4 to 9)
C46 Infrastructure Investment below “A” or “EL1” IOEL
C47 Debt Instruments of InvITs - Other Investments IOIT
D APPROVED INVESTMENT SUBJECT TO
Page 65 of 100
EXPOSURE NORMS
D01 PSU - Equity shares - Quoted EAEQ

Corporate Securities - Equity shares (Ordinary)-
D02 EACE
Quoted
Equity Shares - Companies incorporated outside
D03 EFES
India (invested prior to IRDA Regulations)
D04 Equity Shares - Promoter Group EEPG
D05 Corporate Securities - Bonds - (Taxable) EPBT
D06 Corporate Securities - Bonds - (Tax Free) EPBF
D07 Corporate Securities - Preference Shares EPNQ
D08 Corporate Securities - Investment in Subsidiaries ECIS
D09 Corporate Securities - Debentures ECOS
Corporate Securities - Debentures / Bonds/ CPs
D10 EDPG
/Loan - (Promoter Group)
D11 Municipal Bonds - Rated EMUN
D12 Investment properties - Immovable EINP
D13 Loans - Policy Loans ELPL
Loans - Secured Loans - Mortgage of Property in
D14 ELMI
India (Term Loan)
Loans - Secured Loans - Mortgage of Property
D15 ELMO
outside India (Term Loan)
Deposits - Deposit with Scheduled Banks, FIs
D16 (incl. Bank Balance awaiting Investment), CCIL, ECDB
RBI
D17 Deposits - CDs with Scheduled Banks EDCD
Deposits - Repo / Reverse Repo – Govt.
D18 ECMR
Securities
Deposits - Repo / Reverse Repo - Corporate
D19 ECCR
Securities
Deposit with Primary Dealers duly recognised by
D20 EDPD
Reserve Bank of India
D21 CCIL - CBLO ECBO
D22 Commercial Papers ECCP
D23 Application Money ECAM
Perpetual Debt Instruments of Tier I & II Capital
D24 EUPD
issued by PSU Banks
Perpetual Debt Instruments of Tier I & II Capital
D25 EPPD
issued by Non-PSU Banks
Perpetual Non-Cum. P.Shares & Redeemable
D26 EUPS
Cumulative P.Shares of Tier 1 & 2 Capital issued
Page 66 of 100
by PSU Banks

D27 Cumulative P.Shares of Tier 1 & 2 Capital issued EPPS
by Non-PSU Banks
Foreign Debt Securities (invested prior to IRDA
D28 EFDS
Regulations)
D29 Mutual Funds - Gilt / G Sec / Liquid Schemes EGMF
D30 Mutual Funds - (under Insurer's Promoter Group) EMPG
Net Current Assets (Only in respect of ULIP Fund
D31 ENCA
Business)
Passively Managed Equity ETF (Non Promoter
D32 EETF
Group)
D33 Passively Managed Equity ETF (Promoter Group) EETP
D34 Onshore Rupee Bonds issued by ADB and IFC EORB
D35 Debt Capital Instruments (DCI-Basel III) EDCI
Redeemable Non-cumulative Preference Shares
D36 ERNP
(RNCPS- Basel III)
Redeemable Cumulative Preference Shares
D37 ERCP
(RCPS- Basel III)
Additional Tier 1 (Basel III Compliant) Perpetual
D38 EAPS
Bonds – [PSU Banks]
D39 EAPB
Bonds – [Private Banks]
D40 Units of Real Estate Investment Trust (REITs) ERIT
D41 Units of Infrastructure Investment Trust EIIT
D42 Debt ETFs - "Approved Investments" EDTF
Debt Instruments of REITs - Approved
D43 EDRT
Investments
E OTHER INVESTMENTS
E01 Bonds - PSU - Taxable OBPT
E02 Bonds - PSU - Tax Free OBPF
E03 Equity Shares (incl Co-op Societies) OESH
E04 Equity Shares (PSUs & Unlisted) OEPU
E05 Equity Shares - Promoter Group OEPG
E06 Debentures OLDB
Debentures / Bonds/ CPs / Loans etc. - (Promoter
E07 ODPG
Group)
E08 Municipal Bonds OMUN
Page 67 of 100
E09 Commercial Papers OACP
E10 Preference Shares OPSH
SEBI approved Alternate Investment Fund
E11 OAFA
(Category I)
SEBI approved Alternate Investment Fund
E12 OAFB
(Category II)
E13 Short term Loans (Unsecured Deposits) OSLU
E14 Term Loans (without Charge) OTLW
Mutual Funds - Debt / Income / Serial Plans /
E15 OMGS
Liquid Schemes
E16 Mutual Funds - (under Insurer's Promoter Group) OMPG
E17 Securitised Assets OPSA
E18 Investment properties - Immovable OIPI
Passively Managed Equity ETF (Non Promoter
E19 OETF
Group)
E20 Passively Managed Equity ETF (Promoter Group) OETP
E21 Onshore Rupee Bonds issued by ADB and IFC OORB
E22 Debt Capital Instruments (DCI-Basel III) ODCI
Redeemable Non-cumulative Preference Shares
E23 ORNP
(RNCPS - Basel III)
Redeemable Cumulative Preference Shares
E24 ORCP
(RCPS - Basel III)
E25 ORAD
Reclassified Approved Investments - Equity
E26 ORAE
(Point 6 under Note for Regulation 4 to 9)
E27 OAPS
Bonds – [PSU Banks]
E28 OAPB
Bonds – [Private Banks]
E29 Units of Real Estate Investment Trust (REITs) ORIT
E30 Units of Infrastructure Investment Trust OIIT
E31 Debt ETFs - "Other Investments" ODTF
E32 Debt Instruments of REITs - Other Investments ODRT
Fund Total
NAV as on reporting date
Page 68 of 100
% Range (as per F&U -
Actual %
Asset Category Actuarial)
From To
Equity
Debt
Money Market Instruments
Date:
Appointed Actuary Chief Investment Officer Chief Risk Officer Chief Finance Officer
Note:
1. The Amount reported above shall be as reported in Form 3A (Part A) of IRDAI (Investment) Regulations, 2016,
as at the latest Quarter reported to IRDAI.
2. IRDA Approval Reference shall be the Product approval reference No. based on which the 'Segregated Fund'
was launched for the 1st time.
3. Category of Investment specified above are as per Annexure 1 of Master Circular
Page 69 of 100
b. For New Segregated Fund
FORMAT 2
CATEGORIES IN WHICH INVESTMENT WOULD BE MADE - NEW FUND

Name of the Fund:
Asset
Category
SFIN No
Name as
…………………………..
per F&U
(Acturial)

CENTRAL GOVT. SEC, STATE GOVT OR OTHER

B
APPROVED SECURITIES

Other Approved Securities (excluding Infrastructure
B04 SGOA
Investments)
(a) HOUSING & LOANS TO STATE GOVT FOR

C
HOUSING / FFE

C02 Loans to State Government for Fire Fighting Equipment HLSF
C03 Term Loan - HUDCO / NHB / Institutions accredited by NHB HTLH
C04 Commercial Papers - NHB / Institutions accredited by NHB HTLN
Long Term Bank Bonds Approved Investment - Affordable
C07 HLBH
Housing
TAXABLE BONDS
Page 70 of 100
Bonds / Debentures issued by NHB / Institutions accredited
C09 HTDN
by NHB
Bonds / Debentures issued by Authority constituted under
C10 any Housing / Building Scheme approved by Central / State HTDA
/ any Authority or Body constituted by Central / State Act
TAX FREE BONDS
Bonds / Debentures issued by NHB / Institutions accredited
C12 HFDN
by NHB
Bonds / Debentures issued by Authority constituted under
C13 any Housing / Building Scheme approved by Central / State HFDA
/ any Authority or Body constituted by Central / State Act
C16 Debentures / Bonds / CPs / Loans - (Promoter Group) HOPG
Long Term Bank Bonds Other Investment– Affordable

C17 HOLB
Housing
Reclassified Approved Investments - Debt (Point 6 under
C18 HORD
Note for Regulation 4 to 9)

C21 Infrastructure - Corporate Securities - Equity shares-Quoted ITCE
Infrastructure - Debentures / Bonds / CPs / loans -
C24 IDPG
(Promoter Group)
C25 Infrastructure - Infrastructure Development Fund (IDF) IDDF
C26 IORB
(Infrastructure- approved)
Long Term Bank Bonds Approved Investment–
C27 ILBI
Infrastructure
Infrastructure Investments rated not less than “A” along with
C28 IELB
Rating of “EL1”
Page 71 of 100
C29 Debt Instruments of InvITs - Approved Investments IDIT
TAXABLE BONDS

Infrastructure - Other Corporate Securities - Debentures/
C32 ICTD
Bonds
TAX FREE BONDS
Infrastructure - Other Corporate Securities - Debentures/
C36 ICFD
Bonds
(d) INFRASTRUCTURE - OTHER INVESTMENTS

C41 IOPD
(Promoter Group)
C42 IOOB
(Infrastructure- others)
C43 Long Term Bank Bonds Other Investment– Infrastructure IOLB
C44 IORD
Reclassified Approved Investments - Equity (Point 6 under
C45 IORE
APPROVED INVESTMENT SUBJECT TO EXPOSURE

D
NORMS
D02 Corporate Securities - Equity shares (Ordinary)- Quoted EACE
Equity Shares - Companies incorporated outside India

D03 EFES
(invested prior to IRDA Regulations)
Page 72 of 100
Corporate Securities - Debentures / Bonds/ CPs /Loan -
D10 EDPG
(Promoter Group)
Loans - Secured Loans - Mortgage of Property in India
D14 ELMI
(Term Loan)
Loans - Secured Loans - Mortgage of Property outside India
D15 ELMO
(Term Loan)
Deposits - Deposit with Scheduled Banks, FIs (incl. Bank
D16 ECDB
Balance awaiting Investment), CCIL, RBI
D18 Deposits - Repo / Reverse Repo - Govt Securities ECMR
D19 Deposits - Repo / Reverse Repo - Corporate Securities ECCR
Deposit with Primary Dealers duly recognised by Reserve
D20 EDPD
Bank of India
Perpetual Debt Instruments of Tier I & II Capital issued by
D24 EUPD
PSU Banks
Perpetual Debt Instruments of Tier I & II Capital issued by
D25 EPPD
Non-PSU Banks
Perpetual Non-Cum. P.Shares & Redeemable Cumulative
D26 EUPS
P.Shares of Tier 1 & 2 Capital issued by PSU Banks
Perpetual Non-Cum. P.Shares & Redeemable Cumulative
D27 EPPS
P.Shares of Tier 1 & 2 Capital issued by Non-PSU Banks
D28 EFDS
Regulations)
D31 Net Current Assets (Only in respect of ULIP Fund Business) ENCA
Page 73 of 100
D32 Passively Managed Equity ETF (Non Promoter Group) EETF
Redeemable Non-cumulative Preference Shares (RNCPS-
D36 ERNP
Basel III)
Redeemable Cumulative Preference Shares (RCPS- Basel
D37 ERCP
III)
Additional Tier 1 (Basel III Compliant) Perpetual Bonds –
D38 EAPS
[PSU Banks]
D39 EAPB
[Private Banks]
D43 Debt Instruments of REITs - Approved Investments EDRT
E OTHER INVESTMENTS

E06 Debentures OLDB
E07 Debentures / Bonds/ CPs / Loans etc. - (Promoter Group) ODPG
E11 SEBI approved Alternate Investment Fund (Category I) OAFA
E12 SEBI approved Alternate Investment Fund (Category II) OAFB
Mutual Funds - Debt / Income / Serial Plans / Liquid
E15 OMGS
schemes
Page 74 of 100
E19 Passively Managed Equity ETF (Non Promoter Group) OETF
Redeemable Non-cumulative Preference Shares (RNCPS -
E23 ORNP
Basel III)
Redeemable Cumulative Preference Shares (RCPS - Basel
E24 ORCP
III)
E25 ORAD
Reclassified Approved Investments - Equity (Point 6 under
E26 ORAE
E27 OAPS
[PSU Banks]
E28 OAPB
[Private Banks]
Date:
Appointed Actuary Chief Investment Officer Chief Risk Officer Chief Finance Officer
Page 75 of 100
6.2 Fund Clearance and declaration
FORMAT 3
ULIP FUND CLEARANCE

FORMAT OF DECLARATION
1. Name of the Life Insurer :

2. Registration No :
3. ULIP Fund Type: 1. Unit Linked Individual Fund (ULIF) :
2. Unit Linked Group Fund (ULGF) :
4. Clearance Sought For: 1. Existing Segregated Fund :
2. New Segregated Fund :
5. SFIN No :
DECLARATION
1. The Investment Policy (IP) of the Segregated Fund (SFIN) is a part of File & Use procedure, under Section 8.1
of Form IRDAI-Life-Linked-NP, and we confirm that the IP fully complies with IRDAI (Investment) Regulations,
2016 read along with Circulars and Guidelines issued there under
2. The SFIN No……………………… confirms to the procedure prescribed in Section 4.16 (a) (1) (ii) of Investment –
Master Circular, under IRDAI ULIP Funds Clearance Procedure
3. The SFIN No.…………………… is unique and has not been allotted to any other Segregated Fund(s)
4. The ‘SFIN No………………….. invests / will invest only in the ‘exhaustive’ Categories of Investments as provided
in Investment – Master Circular issued under IRDAI (Investment) Regulations, 2016
5. The Investments Categories (as mentioned in point 4 above) in which SFIN No……………………. invests / will
invest is as per the IP [as specified in Section 8.1 of Form IRDAI-Life-Linked-NP of File & Use procedure] and
are covered in the Standard Operating Procedure (SOP), approved by the Investment Committee (IC) which is /
will be followed by the Investment Department
6. The SFIN No………………….. has / would have identifiable, individual ‘Scrips’, grouped as per Guidelines
provided in Investment – Master Circular and the same is / would be identifiable at custodian level, by a
separate sub code.
7. No individual security is / would be earmarked between two or more ‘segregated fund’
8. The SFIN No…………………. or the Scheme / Fund (by whichever name called) is a NEW Scheme / Fund
offered and is NOT a minor modification of existing Scheme / Fund
Page 76 of 100
9. The SFIN No………………… has / would have a ‘single’ NAV, declared on a ‘day-to-day’ basis and uploaded in
the Insurer’s Public Domain and in the Life Insurance Council Website on the same day
10. The below mentioned information is / would be enabled through a portal, for the policyholder through a secured
login:
a. the value of policy wise “units” held by him, as per FORM D02
b. SFIN No……………. wise NAV on both the Insurer’s website and life council website on the same day
11. As part of product brochure, had included the disclosure mandated under FORM D02 and had provided the
secured login details to Policyholders along with the Policy document
12. The ‘Units’ created on a ‘day-to-day’ basis for SFIN No…………………. are / would be backed by Investment
assets
13. The Investment Trial Balance, of SFIN No………………….. is / will be generated through the automated System
14. For SFIN No………………… all prudential and Exposure norms as per IRDAI (Investment) Regulations, 2016
are / will be complied
15. The Fund Management Charges (FMC) is clearly identified with SFIN No……………… and NOT otherwise
16. Transfer of funds between SFINs are / will be done as per the norms laid in point 4.8 (3) of the Investment -
Master Circular
17. The SFIN No………………… is / would be quoted in all ‘Fund’ related filing / disclosure. Also SFIN No
……………….. is / would be mentioned in all documents and all fund-wise information provided to policyholders,
other users (public, distribution channels and others) and on all returns or fund related correspondence with
IRDAI
18. The copy of certificate issued by the Chartered Accountant appointed for certification of Systems and Process
(in relation to integrated systems between Policy Admin System, Investment System and Accounting System) in
place as per the Guidance Note issued in “Investment Risk Management Systems and Process of Insurance
Companies” by The Institute of Chartered Accountants of India, is attached to this declaration
We certify that the information given herein is correct and complete and nothing has been concealed or suppressed.
Signature………………… Signature…………………
APPOINTED ACTUARY CHIEF RISK OFFICER
Signature………………… Signature…………………
CHIEF FINANCIAL OFFICER CHIEF INVESTMENT OFFICER
Page 77 of 100
6.3 Exhaustive Asset Categories as per IRDAI (Investment) Regulations, 2016
a. Exhaustive list of Category Codes
ANNEXURE – 1
CATEGORY OF INVESTMENTS (COI)
The following are the exhaustive Category of Investments (COI) that are permissible under Life, Pension and
General Annuity, Linked Insurance Business, General Insurance (including Re Insurance) and Health Insurance
Business, as per the Insurance Regulatory and Development Authority of India.
No INVESTMENT CATEGORY HEADS CAT CODE
B CENTRAL GOVT. SEC, STATE GOVT OR OTHER APPROVED SECURITIES
B04 Other Approved Securities (excluding Infrastructure Investments) SGOA
C (a) HOUSING & LOANS TO STATE GOVT FOR HOUSING / FFE
C02 Loans to State Government for Fire Fighting Equipment HLSF
C03 Term Loan - HUDCO / NHB / Institutions accredited by NHB HTLH
C04 Commercial Papers - NHB / Institutions accredited by NHB HTLN
C07 Long Term Bank Bonds Approved Investment - Affordable Housing HLBH
TAXABLE BONDS
C09 Bonds / Debentures issued by NHB / Institutions accredited by NHB HTDN
Page 78 of 100
Bonds / Debentures issued by Authority constituted under any Housing / Building
C10 Scheme approved by Central / State / any Authority or Body constituted by Central / HTDA
State Act
TAX FREE BONDS
C12 Bonds / Debentures issued by NHB / Institutions accredited by NHB HFDN
Bonds / Debentures issued by Authority constituted under any Housing / Building
C13 Scheme approved by Central / State / any Authority or Body constituted by Central / HFDA
State Act
C16 Debentures / Bonds / CPs / Loans - (Promoter Group) HOPG
C17 Long Term Bank Bonds Other Investment– Affordable Housing HOLB
C18 Reclassified Approved Investments - Debt (Point 6 under Note for Regulation 4 to 9) HORD

C21 Infrastructure - Corporate Securities - Equity shares-Quoted ITCE
C24 Infrastructure - Debentures / Bonds / CPs / loans - (Promoter Group) IDPG
C26 Onshore Rupee Bonds issued by ADB and IFC (Infrastructure- approved) IORB
C27 Long Term Bank Bonds Approved Investment– Infrastructure ILBI
C28 Infrastructure Investments rated not less than “A” along with Rating of “EL1” IELB
TAXABLE BONDS
C32 Infrastructure - Other Corporate Securities - Debentures/ Bonds ICTD
Page 79 of 100
TAX FREE BONDS
C36 Infrastructure - Other Corporate Securities - Debentures/ Bonds ICFD
C41 Infrastructure - Debentures / Bonds / CPs / loans - (Promoter Group) IOPD
C42 Onshore Rupee Bonds issued by ADB and IFC (Infrastructure- others) IOOB
C43 Long Term Bank Bonds Other Investment– Infrastructure IOLB
C44 Reclassified Approved Investments - Debt (Point 6 under Note for Regulation 4 to 9) IORD
C45 Reclassified Approved Investments - Equity (Point 6 under Note for Regulation 4 to 9) IORE
D APPROVED INVESTMENT SUBJECT TO EXPOSURE NORMS

D02 Corporate Securities - Equity shares (Ordinary)- Quoted EACE
Equity Shares - Companies incorporated outside India (invested prior to IRDA
D03 EFES
Regulations)
D10 Corporate Securities - Debentures / Bonds/ CPs /Loan - (Promoter Group) EDPG
Page 80 of 100
D14 Loans - Secured Loans - Mortgage of Property in India (Term Loan) ELMI
D15 Loans - Secured Loans - Mortgage of Property outside India (Term Loan) ELMO
Deposits - Deposit with Scheduled Banks, FIs (incl. Bank Balance awaiting
D16 ECDB
Investment), CCIL, RBI
D18 Deposits - Repo / Reverse Repo - Govt Securities ECMR
D19 Deposits - Repo / Reverse Repo - Corporate Securities ECCR
D20 Deposit with Primary Dealers duly recognised by Reserve Bank of India EDPD
D24 Perpetual Debt Instruments of Tier I & II Capital issued by PSU Banks EUPD
D25 Perpetual Debt Instruments of Tier I & II Capital issued by Non-PSU Banks EPPD
Perpetual Non-Cum. P.Shares & Redeemable Cumulative P.Shares of Tier 1 & 2
D26 EUPS
Capital issued by PSU Banks
Perpetual Non-Cum. P.Shares & Redeemable Cumulative P.Shares of Tier 1 & 2
D27 EPPS
Capital issued by Non-PSU Banks
D28 Foreign Debt Securities (invested prior to IRDA Regulations) EFDS
D31 Net Current Assets (Only in respect of ULIP Fund Business) ENCA
D36 Redeemable Non-cumulative Preference Shares (RNCPS- Basel III) ERNP
D37 Redeemable Cumulative Preference Shares (RCPS- Basel III) ERCP
D38 Additional Tier 1 (Basel III Compliant) Perpetual Bonds – [PSU Banks] EAPS
D39 Additional Tier 1 (Basel III Compliant) Perpetual Bonds – [Private Banks] EAPB
Page 81 of 100
E OTHER INVESTMENTS
E06 Debentures OLDB
E07 Debentures / Bonds/ CPs / Loans etc. - (Promoter Group) ODPG
E15 Mutual Funds - Debt / Income / Serial Plans / Liquid Schemes OMGS
E23 Redeemable Non-cumulative Preference Shares (RNCPS - Basel III) ORNP
E24 Redeemable Cumulative Preference Shares (RCPS - Basel III) ORCP
E25 Reclassified Approved Investments - Debt (Point 6 under Note for Regulation 4 to 9) ORAD
E26 Reclassified Approved Investments - Equity (Point 6 under Note for Regulation 4 to 9) ORAE
E27 Additional Tier 1 (Basel III Compliant) Perpetual Bonds – [PSU Banks] OAPS
E28 Additional Tier 1 (Basel III Compliant) Perpetual Bonds – [Private Banks] OAPB
Page 82 of 100
Page 83 of 100
b. Valuation methodology for Investment Categories
ANNEXURE – 2
MARKET VALUE - BASIS FOR FORM-3A / FORM-3B
Method for determining the Market Value of Investments to report in FORM 3A, FORM 3B of IRDAI (Investment)
Regulations, 2016
CAT MARKET VALUE – BASIS FOR
NO PARTICULARS
CODE FORM-3A, FORM-3B
A GOVERNMENT SECURITIES
Investments valued either as per prices

A01 Central Government Bonds CGSB provided by FIMMDA or any other rating
agency registered with SEBI.
A02 Special Deposits CSPD At Cost

A03 Deposit under Section 7 of Insurance Act, 1938 CDSS provided by FIMMDA or any other rating
At cost subject to amortisation of
discount
GOVERNMENT SECURITIES / OTHER APPROVED
B
SECURITIES
Investments valued either as per prices /
Yield Matrix provided by FIMMDA or any
other rating agency registered with
SEBI.
B02 State Government Bonds SGGB provided by FIMMDA or any other rating

B03 State Government Guaranteed Loans SGGL provided by FIMMDA or any other rating
Investments valued either as per prices /
Other Approved Securities (excluding Infrastructure Yield Matrix provided by FIMMDA or any
B04 SGOA
Investments) other rating agency registered with
SEBI.
B05 Guaranteed Equity SGGE Book Value.
(a) HOUSING & LOANS TO STATE GOVT. FOR

C
HOUSING AND FFE
C01 Loans to State Government for Housing HLSH At Cost Less Provisions
Page 84 of 100
C02 Loans to State Government for Fire Fighting Equipment HLSF At Cost Less Provisions
Term Loan - HUDCO / NHB / Institutions accredited by
C03 HTLH At Cost Less Provisions
NHB
Valued at amortised cost based on
straight line method of amortisation over
Commercial Papers - NHB / Institutions accredited by
C04 HTLN the remaining maturity period of the
NHB
instrument or using IRR/ YTM basis of
amortisation.
Investments valued either as per
FIMMDA or at applicable market yield
rates published by any Rating Agency
registered with SEBI
C06 Bonds/Debentures/CPs/Loans - Promoter Group HDPG rates published by any Rating Agency
registered with SEBI and loans at cost.
Commercial paper at amortised cost.
Long Term Bank Bonds Approved Investment – FIMMDA or at applicable market yield
C07 HLBH
Affordable Housing rates published by any Rating Agency
TAXABLE BONDS OF
rates published by any SEBI approved
Rating Agency
Bonds / Debentures issued by NHB / Institution FIMMDA or at applicable market yield
C09 HTDN
accredited by NHB rates published by any Rating Agency
Bonds / Debentures issued by Authority constituted Investments valued either as per
under any Housing / Building Scheme approved by FIMMDA or at applicable market yield
C10 HTDA
Central / State / any Authority or Body constituted by rates published by any Rating Agency
Central / State Act registered with SEBI
TAX FREE BONDS
Bonds / Debentures issued by NHB / Institution FIMMDA or at applicable market yield
C12 HFDN
accredited by NHB rates published by any SEBI approved
Rating Agency
Page 85 of 100
Bonds / Debentures issued by Authority constituted Investments valued either as per
under any Housing / Building Scheme approved by FIMMDA or at applicable market yield
C13 HFDA
Central / State / any Authority or Body constituted by rates published by any Rating Agency
Central / State Act registered with SEBI
C14 Debentures / Bonds / CPs / Loans HODS rates published by any Rating Agency
registered with SEBI. Commercial paper
at amortised cost.
C16 Debentures / Bonds / CPs / Loans - (Promoter Group) HOPG rates published by any Rating Agency
Long Term Bank Bonds Other Investment– Affordable FIMMDA or at applicable market yield
C17 HOLB
Housing rates published by any Rating Agency
Reclassified Approved Investments - Debt (Point 6 FIMMDA or at applicable market yield
C18 HORD
under Note for Regulation 4 to 9) rates published by any Rating Agency

C19 Infrastructure - Other Approved Securities ISAS provided by FIMMDA or any other rating
If quoted, valued at Market Value (last

Quoted price should not be later than 30
days). In unquoted, Book Value Less
Provisions (Provisions shall be made at
C20 Infrastructure - PSU - Equity shares - Quoted ITPE the end of the Year. For the purpose of
Quarterly Returns, if there exist any
Provision for any Equity Share at the
beginning of the year, the same shall be
reduced from the Book Value)
Page 86 of 100
days). If unquoted, Book Value Less
Infrastructure - Corporate Securities - Equity shares-
C21 ITCE the end of the Year. For the purpose of
Quoted

days). If unquoted, Book Value Less
C22 Infrastructure - Equity (Promoter Group) IEPG the end of the Year. For the purpose of
C24 IDPG rates published by any Rating Agency
Promoter Group
At NAV (if available) or at cost less
Provision for diminution
Onshore Rupee Bonds issued by ADB and IFC FIMMDA or at applicable market yield
C26 IORB
(Infrastructure- approved) rates published by any Rating Agency
Long Term Bank Bonds Approved Investment– FIMMDA or at applicable market yield
C27 ILBI
Infrastructure rates published by any Rating Agency
Infrastructure Investments rated not less than “A” along FIMMDA or at applicable market yield
C28 IELB
with Rating of “EL1” rates published by any Rating Agency
Page 87 of 100
TAXABLE BONDS
C31 Infrastructure - PSU - CPs IPCP the remaining maturity period of the
amortisation.
Infrastructure - Other Corporate Securities - FIMMDA or at applicable market yield
C32 ICTD
Debentures/ Bonds rates published by any Rating Agency
C33 Infrastructure - Other Corporate Securities - CPs ICCP the remaining maturity period of the
amortisation.
C34 Infrastructure - Term Loans (with Charge) ILWC At Cost less opening Provisions
TAX FREE BONDS

Infrastructure - Other Corporate Securities - FIMMDA or at applicable market yield
C36 ICFD
Debentures/ Bonds rates published by any Rating Agency

C37 Infrastructure - Equity (including unlisted) IOEQ the end of the Year. For the purpose of
Page 88 of 100
C38 Infrastructure - Debentures / Bonds / CPs / loans IODS rates published by any Rating Agency
C40 Infrastructure - Equity (Promoter Group) IOPE the end of the Year. For the purpose of

C41 IOPD rates published by any Rating Agency
(Promoter Group)
Onshore Rupee Bonds issued by ADB and IFC (Infra - FIMMDA or at applicable market yield
C42 IOOB
others) rates published by any Rating Agency
Long Term Bank Bonds Other Investment– FIMMDA or at applicable market yield
C43 IOLB
Infrastructure rates published by any Rating Agency
C44 IORD
Reclassified Approved Investments - Equity (Point 6
C45 IORE the end of the Year. For the purpose of
under Note for Regulation 4 to 9)

Page 89 of 100

APPROVED INVESTMENT SUBJECT TO EXPOSURE
D
NORMS
D01 PSU - Equity shares - quoted EAEQ Market Value
D02 Corporate Securities - Equity shares (Ordinary)-quoted EACE Market Value

Equity Share - Companies incorporated outside India
D03 EFES the end of the Year. For the purpose of
(invested prior to IRDA Regulations)

D04 Equity Shares - Promoter Group EEPG the end of the Year. For the purpose of
Page 90 of 100
D07 Corporate Securities - Preference Shares EPNQ the end of the Year. For the purpose of
D08 Corporate Securities - Investment in Subsidiaries ECIS At Cost less Provision for diminution
Corporate Securities - Debentures / Bonds/ CPs /Loan -
D10 EDPG rates published by any Rating Agency
Promoter Group
D12 Investment properties - Immovable EINP At Cost
D13 Loans - Policy Loans ELPL At Cost
Loans - Secured Loans - Mortgage of Property in India

D14 ELMI At Cost Less Provisions
(Term Loan)
Loans - Secured Loans - Mortgage of Property outside
D15 ELMO At Cost Less Provisions
India (Term Loan)
Deposits - Deposit with Scheduled Banks, FIs (incl.
D16 ECDB At Carrying Cost
Bank Balance awaiting Investment), CCIL, RBI
D17 Deposits - CDs with Scheduled Banks EDCD At Carrying Cost
D18 Deposits - Repo / Reverse Repo - Govt Securities ECMR At Cost
D19 Deposits - Repo / Reverse Repo - Corporate Securities ECCR At Cost
Deposit with Primary Dealers duly recognised by

D20 EDPD At Cost
Reserve Bank of India
D21 CCIL - CBLO ECBO At Carrying Cost
Page 91 of 100
D22 Commercial Papers ECCP the remaining maturity period of the
amortisation.
D23 Application Money ECAM At Cost
Perpetual Debt Instruments of Tier I & II Capital issued FIMMDA or at applicable market yield
D24 EUPD
by PSU Banks rates published by any Rating Agency
Perpetual Debt Instruments of Tier I & II Capital issued FIMMDA or at applicable market yield
D25 EPPD
by Non-PSU Banks rates published by any Rating Agency
D26 Cumulative P.Shares of Tier 1 & 2 Capital issued by EUPS
PSU Banks
D27 Cumulative P.Shares of Tier 1 & 2 Capital issued by EPPS
Non-PSU Banks
D28 EFDS At Carrying Cost
Regulations)
D29 Mutual Funds - Gilt / G Sec / Liquid Schemes EGMF At NAV as on the reporting date
D30 Mutual Funds - (under Insurer's Promoter Group) EMPG At NAV as on the reporting date
Net Current Assets (only in the case of ULIP Fund
D31 EMCA At Book Value
Business)
Traded Price or at NAV as on the
reporting date
reporting date
Redeemable Non-cumulative Preference Shares FIMMDA or at applicable market yield
D36 ERNP
(RNCPS- Basel III) rates published by any Rating Agency
Page 92 of 100
Redeemable Cumulative Preference Shares (RCPS- FIMMDA or at applicable market yield
D37 ERCP
Basel III) rates published by any Rating Agency
Additional Tier 1 (Basel III Compliant) Perpetual Bonds FIMMDA or at applicable market yield
D38 EAPS
– [PSU Banks] rates published by any Rating Agency
D39 EAPB
– [Private Banks] rates published by any Rating Agency
Market Value (last Quoted price should
not be later than 30 days). Where
Market Quote is not available for last 30
days , the Units shall be valued as per
the latest NAV ( not more than 6 months
old) of the Units published by the trust.


reporting date
E OTHER INVESTMENTS
Page 93 of 100
E03 Equity Shares (incl Co-op Societies) OESH the end of the Year. For the purpose of

E04 Equity Shares (PSUs & Unlisted) OEPU the end of the Year. For the purpose of

E05 Equity Shares - Promoter Group OEPG the end of the Year. For the purpose of
E06 Debentures OLDB
E07 Debentures / Bonds/ CPs / Loans etc. - Promoter Group ODPG rates published by any Rating Agency
E09 Commercial Papers OACP the remaining maturity period of the
amortisation.
Page 94 of 100
E10 Preference Shares OPSH the end of the Year. For the purpose of

E13 Short term Loans (Unsecured Deposits) OSLU At Cost Less Provisions
E14 Term Loans (without Charge) OTLW At Cost Less Provisions
E15 Mutual Funds - Debt / Income / Serial Plans OMGS At NAV as on the reporting date
E16 Mutual Funds (under Insurer's Promoter Group) OMPG At NAV as on the reporting date
E18 Investment properties - Immovable OIPI At Cost

reporting date
reporting date
Redeemable Non-cumulative Preference Shares FIMMDA or at applicable market yield
E23 ORNP
(RNCPS- Basel III) rates published by any Rating Agency
Redeemable Cumulative Preference Shares (RCPS- FIMMDA or at applicable market yield
E24 ORCP
Basel III) rates published by any Rating Agency
Page 95 of 100
E25 ORAD
Reclassified Approved Investments - Equity (Point 6
E26 ORAE the end of the Year. For the purpose of
under Note for Regulation 4 to 9)
E27 OAPS
– [PSU Banks] rates published by any Rating Agency
E28 OAPB
– [Private Banks] rates published by any Rating Agency


reporting date
Page 96 of 100
7. LIST OF CIRCULARS COVERED
Circular reference Description
IRDA/F&I/CIR/INV/250/12/2012 Participation of insurers in Repo / Reverse repo transactions in
Corporate Debts securities
IRDA/F&I/INV/CIR/064/04/2013 Regarding Investment limit of 10% for Reverse Repo transactions in
Government Securities
IRDA/ F&I/CIR/INV/074/03/2014 Investment in Equity Exchange traded funds
IRDA/F&I/CIR/INV/156/08/2015 Investment in GILT exchange traded funds (GILT-ETF)
IRDA/F&I/CIR/INV/134/2013 Securities lending and borrowing framework
IRDA /CIR/INV/020/2008-09 Investment in equity shares through IPO
IRDA /CIR/INV/020/2008-09 Investment in Mutual fund
IRDA /CIR/INV/020/2008-09 Investment in Asset Backed Securities, PTCs and SRs
IRDA /CIR/INV/005/2008-09 Investment in Perpetual debt instruments of Bank’s Tier-I Capital
and debt capital instruments of upper Tier-II capital
IRDA /CIR/INV/020/2008-09
IRDA/F&I/Cir/INV/203/2011
Investment in Alternate Investment Fund
IRDA/F&I/INV/CIR/054/03/2013
IRDA-F&I-CIR-INV-172-08-2013
IRDA /INV/ CIR /038/2006-07 Investment in 8.13% OIL Marketing Companies, GOI Special
Bonds, 2021
IRDA/INV-GLR-001-2007-08 Investment 8.15% GOI FCI Special Bonds, 2002 & 8.03% GOI FCI
Special Bonds, 2024 – Other Approved Securities
IRDA /GLR/002/2007-08 Investment in oil companies GOI special bonds
IRDA/F&I /CIR/INV/036/09/2009 Investment in IFFCL Taxable Bonds – Approved Securities-reg.
IRDA/INV /CIR/036/2008-09 Investment in IFFCL Tax free Bonds – Approved Securities

IRDA/INV /CIR/015/June 09 Investment in Indian Depository Receipts (IDR)
IRDA/INV /CIR/193/09/2013 Investment in Infrastructure debt fund – NBFC
IRDA/INV /CIR/194/09/2013 Investment in Infrastructure debt fund – Mutual Fund
IRDA/INV /CIR/008/01/2014 Investment in M/s L&T Infra debt fund – NBFC
IRDA/INV /CIR/250/11/2014 Investment in M/s India Infradebt Limited IDF – NBFC
IRDA/INV /CIR/247/11/2012 Investment in Credit Default Swaps
IRDA/F&I/CIR/INV/196/08/2014 Investment in Onshore Rupee Bonds issued by Asian Development
Bank (ADB) and International Finance Corporation(IFC)
IRDA/F&I/INV/CIR/138/06/2014 Investment in Interest rate derivatives

IRDA/F&I/CIR/INV/063/02/2014 Bank’s capital instruments under Basel III – Investment by
Insurance companies
IRDA/F&I/CIR/INV/213/09/2014 Issue of long term bonds by banks – Financing of Infrastructure and
affordable housing
IRDA/INV/CIR/020/2008-09 Outsourcing of Investment function
IRDA/FA /02/10/2003-04 Transfer of Investment
IRDA/INC/CIR/006/2003-04
IRDA/CIR/F&A/079/Feb-05
IRDA/CIR /INV/062/JAN/05 Transactions on Stock Market on “Cash Basis”
Page 97 of 100
Circular reference Description
IRDA/INV/CIR /029/2005-06 Negotiated dealing system – Order Matching
IRDA/F&I/CIR/INV/115/07/2010 Reporting of OTC transactions in certificates of Deposits (CDs) and
Commercial Papers (CPs) – reg.
IRDA-F&I-CIR-INV-034-02-2015 Transitory Investment Provisions - The Insurance Laws
(Amendment) Ordinance, 2014
IRDA/F&I/CIR/INV/099/03/2014 Reporting of transactions in corporate bonds, commercial papers,
certificate of deposits & securitised debt
IRDA/32/2/F&A/Circulars/169/Jan/2006-07 Prudential norms for Income Recognition, asset classification and
provisioning and other related matters
IRDA-F&I-CIR-INV-053-03-2011 ULIP Fund Clearance
IRDA/F&I/CIR/INV/173/08/2011 ULIP - Fund Clearance procedure and NAV process
IRDA-F&I-CIR-INV-234-10-2011 Clarifications on Fund Approval Procedure and Guidelines on NAV
Process
IRDAI/F&I/CIR/INV/098/04/2021 Investments in Debt Securities of InvITs and REITs
IRDAI/F&I/CIR/INV/008/01/2021 Credit Rating – Applicable for Infrastructure Investments
IRDAI/F&I/CIR/INV/81/04/2022 Exposure of Insurers to Financial and Insurance Activities
IRDAI/F&I/CIR/INV/246/09/2020 Implementing RFQ platform for Investments in Corporate

Bonds/Commercial Papers
IRDA/F&I/CIR/INV/222/12/2019 Guidelines for investment in Debt ETFs with CPSE Bonds as
underlying
IRDA/F&I/CIR/INV/085/04/2020 COVID-19-Rescheduling of Term Loans
IRDA/F&I/CIR/INV/181/07/2020
IRDAI/F&I/CIR/INV/216/08/2020
IRDAI/F&I/CIR/INV/065/03/2021 Dividend Criteria for Equity Investment under “Approved
IRDAI/F&I/CIR/INV/255/09/2021 Investment”
IRDAI/F&I/CIR/INV/51/03/2022
Control & Monitoring Mechanism of Investment Operations- Work
IRDAI/INV/001/2021 from Remote Location
IRDAI/F&I/CIR/INV/165/8/2022 Amendments to Investment Master Circular
Page 98 of 100
8. LIST OF CIRCULARS DISCONTINUED
Date Circular reference Short Description

08-11-04 INV-CIR-046-2004-05 Investment in Equity Share through IPO
Audit of Investment & Risk Management system &
04-08-09 INV/CIR/23/2009-10
Process, Concurrent Audit
Settlement of OTC trades in corporate bonds on
27-09-09 INV-CIR-077-2009-10
DvP - 1 Basis
Fund Approval Procedure and Guidelines on NAV
17-08-11 IRDA/F&I/CIR/INV/187/08/2011
Process
Clarifications on IRDA Investment Regulations,
30-10-13 IRDA/F&I/INV/CIR/213/10/2013
2000 (Fifth Amendment)
INV/GLN/004/2003-04 Mutual Fund Investments
INV/CIR/007/2003-04 Investment In Venture Fund – Reg.
FIMMDA Reporting Platform for Corp Bond
10-09-07 INV/CIR/035/2007-08
Transactions
INV/GLN/008/2004-05 Fixed Income Derivatives
GUIDELINES - INV/GLN/003/2003-04 Market Value – Basis for FORM-3A / FORM-3B
27-10-08 21/IRDA/ACTL/ULIP/OCT-08 Money Market Instruments in Unit Linked Products
17-10-03 IRDA/INV/005/2003-04 Operation of CSGL Account

IRDA (Investment) (Fourth Amendment)
11-11-08 INV/CIR/020/2008-09
Regulations, 2008
Approving MCX Stock Exchange as Recognized
05-10-09 INV-CIR-040-2009-10
Stock Exchange
IRDA (Investment) (5th Amendment) Regulations,
04-04-13 IRDA/F&I/CIR/INV/067/04/2013
2013
Clarifications on IRDA (Investment) Regulations,
2000
Certificate U/S 28(2A), 28(2B) / 28B (3) Of
INV/GLN/006/2003-04
Insurance Act, 1938
INV/CIR/031/2004-05 Outsourcing Of Investment Function
Deposit Under Section 7 Of Insurance Act, 1934,

INV/CIR/009/2003-04
Held In A Bank Belonging To “Promoter Group”
Certification Of Section 7 Deposit Certification Of Section 7 Deposit – Reg

26-03-12 IRDA/F&I/CIR/INV/69/03/2012 Declaration of NAV, website
Guidance note on preparation of investment
returns 2013
03-03-14 IRDA/F&I/INV/CIR/028/01/2014 BAP - Investment Module
11-02-08 IRDA/Reg/3/44/2008 Infrastructure investment definition
INV/GLN/005/2003-04 Statement of Investment Reconciliation
INV/GLN/007/2003-04 Explanation on Definition of “Group”
Page 99 of 100
Date Circular reference Short Description
Outsourcing Of Investment Function - Life
28-12-04 INV/CIR/058/2004-05
Insurance
Clarification on Investments in Central Government
27-07-09 IRDA/INV/GLR/LR/001/2009-10
Securities
Relaxation in Investment Parameters of Debt/
26-12-08 IRDA/INV/CIR/027/2008-09
Equity Segment
Withdrawal of Deposit under Section 7 of
30-04-15 IRDA/F&I/CIR/INV/093/04/2015
Insurance Act 1938
8/RBI/05-06 Insurance sector’s exposure to the Capital Market
24-04-09 8-RBI-09-10 Insurance Sector's Exposure to Capital Markets
Exposure limits on the Investments in Housing
08/08/2013 IRDA-F&I-INV-CIR-155-08-2013
Finance and Infrastructure Finance companies
Page 100 of 100

Investment Master Circular October 2022

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REF: IRDA/F&I/CIR/INV/226/10/2022 OCTOBER 27, 2022

INVESTMENTS - MASTER CIRCULAR

Investment – Master Circular Page 2 of 100

2. RISK MANAGEMENT AND CONCURRENT AUDIT

2.1 Investment Risk Management Systems and Process

3.1 Investment in Equity Exchange Traded Funds

Investment – Master Circular Page 3 of 100

5. DISCLOSURES AND REPORTING NORMS

6. FUND CLEARANCE FORMATS & INVESTMENT CATEGORY CODES

6.1 Asset Categories Sheet

Investment – Master Circular Page 4 of 100

7. LIST OF CIRCULARS COVERED

8. LIST OF CIRCULARS DISCONTINUED

Investment – Master Circular Page 5 of 100

a. Investment in Equity Shares through IPO1

1. Equity Shares are being “listed” through IPO

b. Limit for Investment in IPO

c. Securities Lending and Borrowing (SLB) framework2

1IRDA /CIR/INV/020/2008-09 Dt. 22nd Aug 2008

2IRDA/F&I/CIR/INV/134/2013 Dt. 12th July 2013

Investment – Master Circular Page 6 of 100

1.3 MUTUAL FUNDS (INCL. EXCHANGE TRADED FUNDS - ETFs)

a. Investment in Equity Exchange Traded Funds3

3IRDA/F&I/CIR/INV/074/03/2014 Dt. 03rd Mar, 2014

Investment – Master Circular Page 7 of 100

b. Investment in GILT Exchange Traded Funds (GILT-ETF) 5

4 IRDAI/F&I/CIR/INV/165/8/2022 Dt.03rd Aug, 2022

Investment – Master Circular Page 8 of 100

“Investment Assets” as per Regulation 2(i) of IRDAI

6IRDA/CIR/INV/020/2008-09 Dt 22nd Aug 2008

Investment – Master Circular Page 9 of 100

1.4 INVESTMENT IN ASSET BACKED SECURITIES (ABS), PASS THROUGH CERTIFICATES

8 IRDA/F&I/CIR/INV/222/12/2019 Dt11th Dec,2019

Investment – Master Circular Page 10 of 100

1.5 INVESTMENT IN ALTERNATIVE INVESTMENT FUND (AIF)9

9IRDA/CIR/INV/020/2008-09 Dt. 22nd Aug 2008,

Investment – Master Circular Page 11 of 100

The above ‘10%’Limit shall be read as

General Insurer 5% of Investment Assets 10% of AIF /VF size

The above ‘10%’ Limit shall be read as

1.6 DEBT SECURITIES ISSUED BY BANKS

a. Innovative Perpetual Debt Instruments for inclusion as Tier 1 Capital

11IRDA/CIR/INV/020/2008-09 Dt. 22nd Aug 2008

Investment – Master Circular Page 12 of 100

b. Bank’s Capital Instruments under Basel III – Investment by Insurance Companies12

a. Debt Capital Instruments (DCI)

12IRDA/F&I/CIR/INV/063/02/2014 Dt. 13th Feb 2014

Investment – Master Circular Page 13 of 100

13IRDA/F&I/CIR/INV/213/09/2014 Dt. 12th Sep 2014

Investment – Master Circular Page 14 of 100

b. Investment in Oil Companies GOI Special Bonds

c. Investment in IIFCL Taxable Bonds – Approved Securities15

15IRDA/F&I/CIR/INV/036/09/2009 Dt 17th Sep 2009

Investment – Master Circular Page 15 of 100

e. Investment in Indian Depository Receipts (IDR)17

f. Investment in Infrastructure Debt Fund - NBFC18

g. Investment in Infrastructure Debt Fund – Mutual Fund 19

16IRDA/INV/CIR/036/2008-09 Dt 06th Feb 2009

Investment – Master Circular Page 16 of 100

h. Investment in M/s L&T Infra Debt Fund – NBFC20