The Insurance Regulatory and Development Authority (IRDA) has removed the 10 per cent exposure limit on reverse repo transactions by insurers.
Insurance companies will now be free to invest in reverse repo transactions in government securities as per their discretion.
IRDA said reverse repo transactions in Government securities were treated on a par with collateralised borrowing and lending obligation transactions and the 10 per cent investment limit wasn’t applicable to this category, in a circular to the chief executives of all insurance companies
However, in case of corporate bonds, the investment limit would be 10 per cent of all the funds.