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IRDA to allow insurers to hedge interest rate risks

IRDA has sought feedback of stakeholders on the draft within 30 days

June 21, 2013 4:27 IST | India Infoline News Service
The Insurance Regulatory and Development Authority (IRDA) on Wednesday proposed to allow insurers to hedge their interest rate risks with long term financial derivative instruments.

These derivative instruments also include forward rate agreements and interest rate swaps.

The insurance companies will also be allowed to hedge their long term interest rate risks through exchange traded interest rate futures, according to the IRDA draft guidelines on 'fixed income derivatives'.

At present, insurers can hedge their risks through derivative instruments with a maturity period of up to one year only.

IRDA has sought feedback of stakeholders on the draft within 30 days.




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