There should be a clause in the Private Placement Memorandum stating that the capital (including any proceeds) received from the insurer shall not be withdrawn, utilized or pledged for any investment outside India, IRDAI said in a circular.
The AIF’s statutory auditors must confirm that the insurer’s capital is not invested outside India and the insurer must obtain a compliance certificate from the AIF confirming that all foreign investments are disclosed to the insurer.
The “Excusal Rights” were validly invoked for the insurer’s investments and no costs related to foreign assets were charged to the insurer. The insurer’s concurrent auditor will also have to certify compliance with the provisions of excuse rights in respect of the insurer’s investments in AIFs with exposure outside India, the insurance regulator said.
As per the norms of Section 27E of the Insurance Act, 1938 and also the related rules of SEBI, insurance companies in India have strict excuse rights in respect of Alternative Investment Funds (AIFs) which prohibit investments outside India.
Insurers may be exempted or excluded from investing in AIFs that violate laws, regulations or internal policies, especially if the AIF invests in foreign securities, engages in prohibited leverage or acts as a fund of funds.
Published on February 13, 2026
#IRDAI #asks #insurers #invest #foreign #alternative #investment #funds