Basel, Switzerland: India’s insurance sector faces no downside risks because investment in derivatives or credit default swaps is largely not permitted, the head of the country’s insurance regulatory body said on Monday.
J. Hari Narayan, chairman of the Insurance Regulatory and Development Authority of India (Irda), said: “For one thing we don’t permit investment in derivatives and so on. We also don’t permit CDSs (credit default swaps). We don’t permit any insurance against default. We permit it only to a limited extent, in terms on debt.”
When asked if the country’s insurers were facing downside risks, he said: “No, nothing in particular.”