The insurance regulator IRDAI has laid out conditions for insurers to facilitate their investment in units of listed Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs).
Earlier IRDAI had permitted insurers to invest in Units of listed InvITs and Real REITs and after Finance Act, 2021 permitted Trusts to issue Debt Securities, the following conditions will apply to insurers investing in “Debt Securities” issued by InvITs / REITs, said IRDAI on Thursday..:-
– No insurer shall invest more than 10% of the Outstanding Debt instruments (including the current issue) in a singleInvIT/REITs issue.
-The cumulative Investments in Units and Debt Instruments of InvITs and REITs shall not exceed 3% of total fund size of the Insurer at any point of time.
– No investment can be made in Debt instruments of an InvIT/REIT where the sponsor is under the promoter group of the insurer.
– Group shall have the meaning as defined under Regulation 2(g) of IRDAI (Investment) Regulations, 2016
– Investment in Debt Instruments of InvIT will form part “Infrastructure Investments”.
The Debt Instruments of InvIT / REIT shall be rated and not less than “AA” as a part of Approved Investments.
– Debt Instruments of InvITs / REITs rated and or downgraded below “AA” shall form part of Other Investments.
-Investment in Debt Instruments of REIT will form part of industry group “Real Estate Activities” under NIC Industry Classification.
-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.