As per the Insurance Act an insurance company at present can invest 10% of the fund or 10% of the company’s stake whichever is lower.
“I think insurance companies must be more conservative in their approach… I would urge that prudence should be hallmark of insurance,” J HariNarayan, chairman, Insurance Regulatory and Development Authority (IRDA) said on the sidelines of a Ficci function.
“The government had proposed a certain pattern of investment with certain prudential limit for LIC and called our commentwhich we have given,” he said.
LIC has been keen on investing more than the 10% that it is currently to invest in other listed firms as it is sitting on a huge cash reserve.
He said the Centre must look at launching a national health insurance scheme by combining existing plans to improve penetration and coverage.