Insurance Regulatory and Development Authority of India ("IRDAI"), vide its circular no. IRDAI/ Fel/CIR./lNV/215l08/2020 dated August 21, 2020 ("Circular"), has made a change in the approved investments as provided under Regulation 3 of IRDAI (Investment) Regulations, 2016 ("Regulations") relaxing the dividend criteria for equity investments by insurers.
Insurers are now permitted to classify investments in preference and equity shares as part of "approved investments" if such shares have paid dividend for at least two out of three consecutive years immediately preceding. Earlier, the requirement under Regulation 3(a)(4) and 3(a)(5) of the Regulations was that dividend should have been paid on the preference and equity shares for at least two consecutive years immediately preceding.
This relaxation has been allowed for the period from April 1, 2020 to March 31, 2021.
Please find a copy of the Circular here.
This update has been contributed by Adity Chaudhury (Partner) and Aditi Gupta (Associate).
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