During the Insurance Summit held by CII, Mr. Rajiv Takru, Financial Services Secretary, told the press that the debt investment norms for Life Insurance Corporation (LIC) of India have been relaxed to 20% by IRDA.
Mr. T. Vijayan – Chairman of Insurance and Regulatory Development Authority of India (IRDA) said that exposure limit would change from sector to sector and that infrastructure and housing sector would be eligible for higher exposure limit. In addition to this, LIC can invest additional 5% subject to the approval from its Board of Directors.
LIC invested over Rs.2 lakh crore in the last year in venues such as government bonds, securities, equity and debentures. With regard to the cap in equity investment norms of LIC, the status quo of 15% cap continues.
However, on a positive note this will give the much needed boost to corporate debt market, especially when the corporate debt market is sluggish after Reserve Bank of India took steps to tighten liquidity.
