DOMESTIC SYSTEMICALLY IMPORTANT INSURERS (D-SIIS) FOR 2021-22
- 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.