Permitting insurers’ investments in AT1 bonds and Tier 2 Capital of RBI regulated All India Financial Institutions (AIFIs)
December 19, 2025
1. Under the current regulatory framework, IRDAI allows insurers to invest in AT1 Bonds and Debt Capital Instruments and Preference Share Capital Instruments forming Tier 2 capital of Banks.
2. Further, RBI allowed All India Financial Institutions (AIFIs) to issue Additional Tier 1 Bonds and Tier 2 capital w.e.f 1st April, 2024 under Prudential Regulations on Basel III Capital Framework.
3. IRDAI as part of continuous regulatory initiatives and to enable insurers to have wider scope for investments and portfolio diversification hereby permits investments in the following instruments issued by RBI regulated All India Financial Institutions (AIFIs).
i. AT1 bonds and
ii. Debt Capital Instruments and Preference Share Capital Instruments (except Perpetual Cumulative Preference shares) forming Tier 2 Capital.
4. Investments in the above instruments are to be made in line with existing provisions applicable to the insurers’ investments in banks which are covered under para 1.6(b) and (d) of Chapter 3 of Master Circular on Actuarial, Finance and Investment Functions of Insurers dated 17th May, 2024.
5. The insurers are required to use the existing category codes specified for investments in the above instruments of PSU banks while making these investments.
This circular is issued in line with clause 12(6) of Schedule III of IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024.
IRDAI and DFS Organises Workshop on CPGRAMS to Strengthen Grievance Redressal in the Insurance Sector
December 19, 2025
The Insurance Regulatory and Development Authority of India (IRDAI), jointly with the Department of Financial Services (DFS), Government of India, organised a one-day Workshop on 19th December, 2025 on the Centralised Public Grievance Redress and Monitoring System (CPGRAMS) in Hyderabad, with a focus on strengthening grievance redressal mechanisms in the insurance sector.
The workshop brought together senior officials from DFS, Grievance Redressal Officers (GROs) of insurers, and Sub-Appellate/Appellate Authorities, along with IRDAI officials with the objective of strengthening grievance handling practices, improving quality and timeliness of redressal, and deepening institutional accountability across the insurance ecosystem.
Delivering the inaugural address, the Chairman, IRDAI, underlined the centrality of grievance redressal to public trust in insurance. He observed that “when a citizen takes the trouble to write a grievance, they are not filling a form—they are sending a signal that they need the system to listen. How we respond to that signal shapes trust not only in insurance, but in institutions themselves”. He also emphasised that timely and effective resolution of grievances is a critical pillar of policyholder protection and an essential element of regulatory oversight.
Senior officials of IRDAI discussed the Grievance Redressal Mechanisms. A detailed presentation by the DFS team provided an overview of the Citizens’ Grievance Landscape across the insurance sector.
The workshop featured interactive sessions, including an open house with participants, presentations from industry representatives, and a detailed walkthrough of CPGRAMS by DFS officials. Discussions with the CPGRAMS team focused on identifying systemic improvements, enhancing data integration between CPGRAMS and Bima Bharosa, and improving the quality and timeliness of responses to public grievances.
Concluding the workshop, the Chairman, IRDAI stated that “Choose the customer when in doubt. Treat grievances as early warnings. And let every resolution strengthen trust—not just close a case”. Senior officials from DFS and IRDAI reiterated the shared commitment of IRDAI, the Government and the industry to strengthen grievance redressal systems, reduce pendency, and improve policyholder experience. IRDAI underscored its continued commitment to work closely with all stakeholders to ensure that grievance redressal mechanisms remain responsive, efficient and aligned with the broader objective of protecting the interests of policyholders.
Consultation on Insurers’ Investment in Infrastructure SPVs
December 18, 2025
Background
Over the past decade, the Government of India has prioritised infrastructure development as a key driver of economic growth and an essential component of Vision 2047, supported by consistently high capital expenditure in Union Budgets. This policy thrust is reinforced by IRDAI investment regulations, which mandate minimum exposure to housing and infrastructure, and RBI’s framework allowing Partial Credit Enhancement to improve bond ratings and access to long-term funding for infrastructure projects.
In line with these initiatives, regulatory proposals aim to facilitate insurer investments in infrastructure SPVs once projects achieve commercial operations and stable cash flows, without requiring parent guarantees. Such operational infrastructure assets offer predictable revenues, lower risk, and attractive long-term returns, making them well-suited to insurers’ asset–liability management needs.
Proposed Regulatory Provision
In view of the above, a new provision is proposed to be added after the Note IV of the clause 8 of Schedule III of IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 which reads as below:
“IV(a): Notwithstanding the provisions mentioned in the note IV above, Insurers are allowed to invest a maximum 20% of the debt issued by Public Limited Special Purpose Vehicle engaged in infrastructure sector and where project has commenced commercial operation and cash flows have stabilized, or amount under clause 8(2)(a), whichever is lower, as a part of Approved Investments, provided:
- the proceeds of the issue are utilized to refinance the existing debt/loan of SPV;
- the debt/loan is treated as standard in the books of the lender;
- the debt issued shall have minimum credit rating of AA.
Comments from stakeholders:
IRDAI invite the comments of the stakeholders on the above proposed provision considering the following:
a) Adequacy to support SPV funding structure in a viable infrastructure project.
b) Disclosures to be mandated to ensure adequate in-built risk mitigation for investments in such projects.
c) Any other feedback.
All the stakeholders are requested to submit their comments / suggestions, if any, on the proposed draft regulation within 21 days from the date of circulation to Mr. Manish Misra, AGM at manishmisra@irdai.gov.in and Dr. Ravinder Kaur, DGM at Ravinder.kaur@irdai.gov.in.
