Insurance Regulator Update

The Insurance Regulatory and Development Authority of India has directed insurers not to invest in overseas Alternative Investment Funds, reinforcing restrictions under existing regulatory norms.

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IRDAI directs insurers to avoid investments in overseas AIFs

The regulator said statutory auditors of AIFs must confirm that insurer capital is not invested outside India. Insurers are also required to obtain a compliance certificate from the AIF confirming that any overseas investments are fully disclosed. Additionally, the concurrent auditor of the insurer must certify adherence to excusal rights provisions in respect of investments in AIFs with overseas exposure.

Under Section 27E of the Insurance Act, 1938 and related rules framed by the Securities and Exchange Board of India, insurers have strict excusal rights that prohibit exposure to foreign investments through AIF structures.

The move aims to ensure that insurance funds remain within permitted domestic investment avenues and comply with prudential norms governing capital deployment.

IRDAI Urges Insurers to Cut Costs to Improve Health Cover Affordability

The Insurance Regulatory and Development Authority of India has asked insurers to rationalise operating and distribution costs to make health insurance policies more affordable for consumers, amid concerns over rising premiums and limited penetration.

The regulator has emphasised that high acquisition expenses, including commissions and administrative overheads, are contributing to elevated premium levels. Insurers have been advised to review expense structures, streamline processes and improve efficiency so that cost savings can be passed on to policyholders.

The direction comes at a time when healthcare inflation continues to exert pressure on claims payouts, making affordability a critical concern for households. IRDAI has reiterated that improving insurance coverage requires balancing sustainable underwriting with reasonable pricing.