Some Indian insurers are asking regulators to allow them to use more interest-rate hedging tools as they prepare to play a larger role in the country’s money markets, according to people familiar with the matter.

The request comes as insurance companies anticipate increased participation in fixed-income trading and portfolio management. Currently, regulatory constraints limit the types and volumes of derivative instruments available for risk management purposes.

Industry representatives argue that broader access to swaps and other hedging mechanisms would align domestic practices with global standards. Enhanced capabilities would also support more efficient asset-liability management amid volatile interest-rate environments.

Regulatory authorities are reviewing the proposal amid broader financial-market reforms. A decision could reshape how institutional investors manage duration risk and influence liquidity in government and corporate bond segments.