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Industry Specific - Insurance Central Ministry of Finance Insurance Act, 1938

Clarifications on provisions with respect to investment in Alternative Investment Funds(AIFs)

12-Feb-2026 | Cir No.IRDAI/F&I/CIR/INV/28/2/2026

IRDAI has issued clarifications regarding investments in Alternative Investment Funds (AIFs), with reference to Para 1.5 of the Master Circular on Actuarial, Finance and Investment Functions of Insurers dated 17 May 2024. Para 1.5 of the Master Circular sets out the provisions that insurers are required to comply with in order to invest in Alternative Investment Funds. Pursuant to this circular: 1. Certain conditions have been specified to ensure compliance with the provisions of Para 1.5 of the Master Circular. Some of the key conditions are outlined below: a. The insurer is required to provide a formal declaration, citing Section 27E of the Insurance Act, 1938, as the basis for its inability to participate in overseas investments of the AIF at the time of making the investment. b. The statutory auditors of the AIF are required to confirm that the insurer's capital is not invested outside India. c. The insurer is required to obtain a compliance certificate from the AIF confirming that: - all overseas investments have been disclosed to the insurer; - the "Excusal Rights" were validly invoked in respect of the insurer's investments; and - No costs related to overseas assets were charged to the insurer. 2. Sub-para 4(d) of Para 1.5 of the Master Circular has been substituted. It now specifies that the insurer is required to comply with the single AIF exposure limit specified under column (c) of the table in sub-para 7 below, in respect of both its direct exposure and its indirect exposure (through a Fund of Funds) to such single AIF. Kindly refer to the attached document for further details.

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