Mumbai, Jan 31 (IANS) The Insurance Regulatory & Development Authority (IRDAI) has advised insurance companies to create a buffer against their exposure to the beleaguered Infrastructure Leasing & Financial Services (IL&FS) Group, an official said here on Thursday.
IRDAI Chairman S.C. Khuntia has asked them to make suitable provisions as those exposures cannot be written off, five months after the regulator had sought the insurance companies’ equity and debt exposures to the IL&FS group.
While the public-owned Life Insurance Corp of India (LIC) is the biggest stakeholder with a 25.34 percent stake in IL&FS, the private player IDBI Federal Life Insurance has an exposure of around Rs 20-crore plus.
Aditya Birla Sun Life has no exposure but the real extent of exposure of the other insurance companies in the IL&FS is not clear so far.
The IRDAI and Khuntia had earlier warned insurance companies on probable risks associated in investments in low-rated debt instruments.
Later, some of the group companies of IL&FS defaulted on debt repayments causing a liquidity freeze in the NBFC sector in September 2018.
Presently, the IL&FS is in the red with a debt of over Rs 90,000 crore and the Ministry of Corporate Affairs dragged the company to the National Company Law Tribunal where it (IL&FS) submitted a revival plan.