LIC Chairman Advocates Diversifying Insurance Investments Through Expanded Asset Classes
Life Insurance Corporation of India (LIC) Chairman Siddhartha Mohanty emphasised the need for expanded investment avenues for insurance companies to bolster liquidity, advocating for access to new asset classes like sovereign gold bonds and equity derivatives. Speaking at the SBI Banking and Economic Conclave, Mohanty highlighted the existing restrictions on insurance company investments, calling for broader access to enhance financial flexibility.
Despite LIC's substantial debt investment portfolio, Mohanty noted the lack of access to RBI's Central Repository of Information on Large Credits (CRILIC) data, a critical debt data platform. This limitation, despite LIC's significant market presence, is a challenge that needs rectification through ongoing discussions with the RBI.
With over Rs 45 lakh crore invested in capital markets and various instruments, including substantial holdings in corporate debt and equities, LIC primarily seeks more long-term securities to align with their asset-liability management, crucial for managing their predominantly long-term liabilities.
Mohanty also stressed the necessity for an inclusive inter-regulatory framework that allows direct discussions between regulators, market participants, and stakeholders to address operational challenges effectively.
Regarding the recent draft IRDAI guidelines proposing alterations in surrender value and charges for life insurance companies, Mohanty mentioned that while LIC will experience some impact, it might be less compared to other players. LIC has submitted its feedback and comments to IRDAI, aligning with other market participants to address the potential effects of these proposed changes.
