Indian insurers are urging the regulator to update bond valuation rules to distinguish between debt issued by state-run entities and private companies.
The proposed shift aims to enhance participation in the corporate debt market and increase liquidity in India's corporate bond market.
Insurers seek to protect their Unit-Linked Insurance Plans (ULIPs) from potential losses through this request.
The move could lead to a more accurate valuation of bonds with the security-level approach, although it warrants careful risk management.