To increase flow of funds to housing finance sector, the Insurance Regulatory and Development Authority (IRDA) has enhanced the exposure limits of insurers to housing finance companies.
Insurers' single company exposure limit including debt and equity is increased to 20% from existing 10%.
The 20% limit can be further increased by an additional 5% with the prior approval of Board of Directors, the IRDA said in a circular on 7th August.
The group and promoter group exposure norms will continue to apply on the investments made in a Housing Finance Company, it said.
"Single investee debt exposure limits in housing finance companies are enhanced to 20 per cent of equity plus free reserves-excluding revaluation reserve plus debentures/bonds taken together," IRDA said.
Investment into a single group companies is capped at 15% of the insurer's fund size.