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IRDAI has issued a circular outlining monitoring requirements for insurers’ investments in Alternative Investment Funds (AIF). Insurers are required to adhere to certain guidelines including quarterly declaration of AIF Net Asset Values (NAVs), approval for rollovers, and submission of quarterly returns.

Analysis:

i. Quarterly Declaration of NAVs: Insurers are now required to declare the Net Asset Values (NAVs) of AIFs on a quarterly basis. This provision ensures transparency and enables the monitoring of AIF investments’ performance. By regularly disclosing NAVs, insurers can provide stakeholders with updated information on the valuation of their AIF investments.

ii. Approval for Rollovers: The circular mandates that the rollover of investments in AIFs must be approved by the Board or Investment Committee of the insurer. This requirement ensures that investment decisions related to rollovers are made with appropriate oversight and due diligence. Insurers must carefully evaluate the potential risks and benefits associated with extending their investments in AIFs.

iii. Submission of Quarterly Returns: Insurers are obligated to submit a quarterly return for their investments in AIFs, following the specified format provided in Annexure-I of the circular. This reporting requirement aims to enhance regulatory oversight and enable the monitoring of insurers’ exposure to AIFs. The timely submission of accurate data facilitates effective supervision and ensures compliance with regulatory guidelines.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA

CIRCULAR REF: IRDAUF&I/CIR/INV/139/06/2023 Date: 28th June, 2023

Monitoring of Investments in Alternative Investment Fund (AIF)

The Authority vide its circular IRDA/F&I/CIR/INV/172/08/2013 dtd.23rd August,2013 had permitted insurers for investments in Category I and II AlFs (within SEBI Regulations) as a part of “Other Investments”.

With a view to closely monitor the exposure of insurers to AlFs, it is hereby advised that the insurers shall adhere the following requirements with respect to investments in AlFs:

1. The NAVs of AlFs should be declared on quarterly basis.

2. The rollover of investments in AlFs should be approved by the Board/Investment Committee.

3. The insurers shall submit a quarterly return for investments in AlFs as per the format specified in Annexure-I within 15 days from the end of each quarter.

All insurers are required to ensure compliance.

(Ammu Venkataramana)
General Manager (F&I)

Encl: As above

Annexure-1

(To be submitted on quarterly basis in excel format only. The name of the
excel sheet should be the name of the insurer.)

Name of the Insurer: – ________

Name of AIF Date of Investment Amount (Rs. in Crore) Number of Units Status of the Fund (existing/ ceased) Any Rollover (Amount Rs. in Crore) Date of Rollover Authorisation for Rollover NAV of investment as on—— (Rs. in Crore)

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