As per the ‘Investment -Master circular -2017’ by IRDAI has not permitted investments in AIFs, which are of Fund of Funds(FoFs) and leverage funds and now that circular has been amended.
- As per the amendment, no investments are 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.
- Insurers are allowed to invest in FoFs which comply with the requirement of Section 27E of the Insurance Act, 1938 within the country.
- Insurer’s are barred from investment into FoFs which are utilized by AIFs to invest in overseas companies/funds.
- Insurers are not allowed to invest in an AIF which has exposure to an FoF in which the insurer has invested already.
- Certificate Requirement: On a quarterly basis, the insurer need to obtain a certificate which will be issued by the concurrent auditor on the compliance of the conditions and file it with quarterly periodical returns
Recent Related News:
IRDAI has hiked the maximum cover under the standard health insurance plan – Arogya Sanjeevani Policy – from Rs 5 lakh to Rs 10 lakh and also has expanded the sum insured bands under the policy to between ₹50,000 and ₹10 lakhs in multiples of ₹50,000 as against the previous range of Rs 1 lakh – Rs 5 lakh.
About Alternative Investment Fund (AIF):
- AIF is a privately pooled investment vehicle that collects funds from sophisticated investors, whether Indian or foreign, for investing it by a defined investment policy for the benefit of its investors.
Categories of AIFs:
- Category I AIFs – Venture capital funds (Including angel funds), Small and Medium Enterprises(SME) Funds, social venture funds, infrastructure funds (Investment for start-up SMEs, infrastructure)
- Category II AIFs – real estate funds, private equity funds (PE funds), funds for distressed assets
- AIFs which do not fall in Category I and III and which do not undertake leverage or borrowing other than to meet day-to-day operational requirements and as permitted in the SEBI (Alternative Investment Funds) Regulations,2012
- Category III AIFs – Hedge funds, Private Investment in Public Equity Funds (PIPE) Funds