Irda allows insurers to invest in OVL, Coal Videsh bonds

The insurance regulator has allowed insurance companies to invest in bonds issued by foreign arms of ONGC - ONGC Videsh Ltd (OVL) - and Coal India - Coal Videsh - for acquiring energy assets abroad—a move that will significantly increase funds available for state energy firms, and at more attractive rates.

Insurance companies have been seeking such investment avenues as they are required to invest 15% of their funds in the infrastructure sector. But this was not allowed as the Insurance Act forbids investments outside the country.

However, investments by companies such as ONGC Videsh Ltd (OVL), the overseas arm of the state-run explorer, are not seen as violations of the act as they are listed in India and returns on their investments are brought back to the country, Insurance Regulatory and Development Authority (Irda) chairman J Hari Narayan said.

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