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Types of investments based on nature of investments

Types of investments (based on nature of investments)

The objective behind this classification is to categorise the investments based on the avenues where investments are made and place a ceiling (cap) or floor (minimum) depending on the type of investment.

Investments of insurers are categorised into the following buckets:

(a) Government Securities – these are predominantly Securities issued by Central Government or State Government which have a sovereign rating and carry a Very high safety

(b) Securities include securities issued by an authority constituted under a Central or State Legislature or by a Corporation

Insurance
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(c) Approved Investments are controlled investments which satisfy any of the conditions mentioned in Section 27A (for Life) and 27B (Non-Life) of the Insurance Act. Further, IRDA have also specified additional investments as “Approved investments” under the Regulations.

(d) Other investments – these are investments which are ‘other category of investments’, other than the ones specified above and which are not prohibited investments.

(e) Prohibited investments – investments in Private Limited Companies and investments out of Policyholders funds outside India.

Insurance Law And Practice - ICSI
Types of investments based on nature of investments Types of investments based on nature of investments Reviewed by Blog Editor on Wednesday, May 17, 2017 Rating: 5

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