The government is likely to relax norms for insurance companies to attract more funds for the infrastructure sector.
The issue was discussed at a meeting between finance minister P Chidambaram and chiefs of public sector insurance majors on Tuesday.
Financial services secretary DK Mittal, however, said no decision has been yet taken. "For that what changes are to be made in the regulations by the government or by income tax department has been looked at."Another meeting on the issue is expected to be held soon.
While the estimated investment corpus with the life insurance firms is R13 lakh crore, roughly 20% is directed towards the core sector.
Insurance firms currently invest only in highest rated "AAA" or "AA" credit-rated debt paper.
"There is a need to revisit investment norms for insurance companies," said J Hari Narayan, chirman, IRDA. "We will look at revising investment regulations over the next month."