The Insurance Regulatory and Development Authority of India vide its notification dated 27th September 2021 has notified the “Dividend Criteria for Equity Investment under “Approved Investment.
IRDAI has permitted Insurers to classify investments in Preference Shares and Equity Shares as part of “Approved Investment” if dividend is paid on such Shares “for at least 2 years out of 3 consecutive years immediately preceding ” instead of “for at least 2 consecutive years immediately preceding” (as required under Regulation 3(a)(4) and 3(a)(5) of IRDAI (Investment) Regulations, 2016) for the period from 1st October, 2021 to 31st March, 2022.
As per regulation 3(a)(4) and 3(a)(5), No insurer shall invest or keep invested any part of its Controlled Fund, otherwise than in approved securities, in any of the following approved investments, namely:—
- preference shares of any company which has paid dividends on its equity shares for at least two consecutive years immediately preceding
- equity shares of any listed company on which not less than ten percent dividends have been paid for at least two consecutive years immediately preceding.
