BFSI - #SectorUpdates
The Insurance Regulatory and Development Authority of India (IRDAI) has allowed private equity funds to invest directly into insurance companies, permitting banks to tie up with nine insurance companies, allowing insurance companies to raise alternative investments like subordinated debt and preference shares without seeking prior approval of the regulator. It also made the investment through Special Purpose Vehicle (SPV) optional for private equity (PE) funds, allowing them to directly invest in insurance companies. By allowing PE players to invest directly in insurance companies, will pave the way for fresh investments, especially in insure-tech and new-age insurance companies. The relaxation in investment criteria for venture capital funds, according to industry experts, is also likely to help attract a higher flow of capital to the insurance sector, resulting in greater innovation, deeper insurance penetration, and better offerings for consumers.