The Insurance Regulatory and Development Authority of India (IRDAI) is likely to ask insurers to create a debenture redemption reserve (DRR). This was discussed at a recent meeting of the authority, and is being followed up.
The DRR provision was added to the Indian Companies Act, 1956, in the year 2000 and has also been included under Section 71 of the Companies Act, 2013.
Under this, an Indian company that issues debentures has to create a redemption pool to protect investors against the possibility of default by the company.
