INVESTMENTS


The insurance money belongs to the policyholders. The insurer is merely a trustee. The insurer is required to invest the funds as determined under the Insurance Act. The funds of the policyholders can not be invested (directly or indirectly) outside India.

The Insurance Company has to follow the norms for investment of funds in Section 27 of the Insurance Act, 1938, read with Rule 3 and Rule 4 of the IRDA (Investment) Regulations, 2000).

 Investments are assets held by an insurer for earning income by way of dividends, rent and interest or for capital appreciation or for other benefits to the insurer. An insurance company makes investment, apart from earning income, to comply with the statutory requirements and also for meeting any unforseen contingencies and claims. There are two main sources of investible funds viz, surplus funds arising out of the business and income from interest and dividends on existing investments.

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