• On December 30, 2021 Insurance regulator IRDAI has identified the state-owned LIC, GIC and New India Assurance Co. Ltd as Domestic Systemically Important Insurers (D-SIIs) for 2021-22, in continuation.

What is D-SIIs?

  • D-SIIs are insurers of such size, market importance, and domestically & globally inter-connected, whose failure or distress will result into significant dislocation in domestic financial system.
  • D-SIIs are perceived as insurers which are ‘too big or too important to fail’ (TBTF).
  • This perception and perceived expectation of government support may reduce market discipline, amplify risk-taking, create competitive distortions, as well as increase the possibility of distress in future.
  • Thus, continued functioning of D-SIIs is necessary for uninterrupted availability of insurance services for national economy.
  • IRDAI identifies D-SIIs on an annual basis and disclose such insurers names for public information.

What are the Requirements for D-SIIs?

  • Public sector insurers are required to raise the level of corporate governance.
  • They are mandated to identify all relevant risks as well as promote a sound risk management culture.
  • They are subjected to enhanced regulatory supervision of the IRDAI.

Insurance Regulatory and Development Authority of India (IRDAI)

  • IRDAI is a regulatory body, working under the jurisdiction of Ministry of Finance. It is tasked to regulate and license the insurance and re-insurance industries across India.
  • The body was constituted in accordance with the Insurance Regulatory and Development Authority Act, 1999.
  • It’s headquarter moved from Delhi to Hyderabad, Telangana in 2001.

Members of IRDAI

  • IRDAI has 10-members, including the chairman, 5 full-time and 4 part-time members appointed by Central government.

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