Insurance sector Current Affairs - 2020
Union Government is going to launch Rs.500 crore Credit Enhancement Fund (CEF) in July 2018 to facilitate infrastructure investments by insurance and pension funds.
The CEF provides additional source of assaurance or gaurantee that borrower will service their loan. It also helps borrower to raise loans at lower interest rates. The fund was first announced in Union Budget for fiscal year 2016-17.
Credit Enhancement Fund (CEF)
CEF will provide credit enhancement for infrastructure projects which will help in upgrading credit ratings of bonds issued by infrastructure companies and facilitate investment from investors like pension and insurance funds.
The initial corpus of the fund will be Rs 500 crore and will be sponsored by IIFCL (India Infrastructure Finance Company). It will operate as a non-banking finance company (NBFC). IIFCL will hold 22.5% stake in the NBFC, while Asian Infrastructure Investment Bank (AIIB) has been offered by the Government to pick up 10% stake.
At present, only $110 billion is being invested in infrastructure in India, against requirement of $200 billion, leading many analysts to classify India as infrastructure deficit country. Most of the present infrastructure project financing is done by banking system. But all these lenders are saddled with problem of non-performing assets (NPAs). So there is need for the private sector to be more active on the infrastructure investment front. CEF will serve as alternative for rising of money for infrastructure projects through corporate bonds.
Tags: Business • Credit Enhancement Fund • Economy • IIFCL • Infrastructure Sector
The Appointments Committee of Cabinet (ACC) has appointed former chief secretary of Karnataka, Subhash Chandra Khuntia as new chairman of Insurance Regulatory and Development Authority of India (IRDAI). He will succeed TS Vijayan whose five-year term ended in February 2018. He will have tenure of period of three years from the date of joining. Subhash Chandra Khuntia is 1981-cadre IAS official from Karnataka,
Insurance Regulatory and Development Authority of India (IRDAI)
IRDA is an apex statutory body that regulates and develops insurance industry in India. It was constituted as per provisions of Insurance Regulatory and Development Authority Act, 1999. Its headquarter is in Hyderabad.
Functions of IRDA
- Protect the rights of insurance policy holders.
- Provide registration certification to life insurance companies
- Renew, modify, cancel or suspend this registration certificate as and when appropriate; promote efficiency in conduct of insurance business
- Promote and regulate professional organisations connected with insurance and reinsurance business; regulate investment of funds by insurance companies
- Adjudication of disputes between insurers and intermediaries or insurance intermediaries.