The Insurance Regulatory and Development Authority of India on 22nd April 2021 has permitted insurers to invest in Units of listed Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs).
The Insurers can invest in debt securities of InvITs and REIT that are rated not less than “AA” under the “approved investment” category. In the event of a subsequent downgrade, the instrument will become part of their “other investments”.
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.
Further No insurer shall invest more than 10 per cent of the outstanding debt instruments (including the current issue) in a single InvIT/REITs issue.
The regulator has also instructed that investment by insurers in the debt instruments of InvIT will be classified as “Infrastructure Investment” and the investment in debt instruments of REITs will form part of industry group ‘Real Estate Activities” under NIC industry classification.
