The International Financial Services Centres Authority on 21st November 2022, notified the International Financial Services Centres Authority (Investment by International Financial Service Centre Insurance Office) Draft Regulations, 2022 which inter-alia provides for manners and processes of investment of IIO s by the IIOs, in various global jurisdiction including in India. The proposed regulations also provide for various matrix, guidance, limitations on investments.
The regulation shall be applicable to the following:
- An IIO incorporated in an IFSC shall undertake investment of assets in accordance with the provisions of these regulations;
- An IIO not incorporated in an IFSC may either chose to follow norms related to investment of assets as applicable to its parent entity or as specified under these regulations; and
- An IIO established as branch of Foreign insurer or Lloyd’s India, registered by the Insurance Regulatory Development Authority of India (IRDAI), may either chose to follow norms related to investment of assets as applicable to its parent entity or as specified under these regulations.
The IIO shall have a Board approved Investment Policy, which shall, inter-alia, provide for situations of breaches, action plans to address breaches, provisions for providing Economic Capital, if required. IIOs shall value all of its assets and liabilities, and maintain solvency margin in accordance with the regulations issued by the Authority in this regard.
Every IIO, in order to meet its liabilities, shall earmark, invest and at all times keep earmarked and invested, assets of value not less than that of its liabilities; Provided that an IIO established as place of business of Indian Insurer or Indian Re-insurer, shall not invest its assigned capital including additional assigned capital, if any, in the IFSC and the said assigned capital shall be invested and continued to be invested in accordance with the regulatory requirements applicable in its home country.
