The Insurance Regulatory and Development Authority of India has retained LIC, GIC and New India as Systemically Important Domestic Insurers (D-SII).
- Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC) and New India have been retained as D-SIIs for the year 2021-22 as well as for the year 2020-21.
- The Insurance Regulatory and Development Authority of India (IRDAI) schedules D-SIIson an annual basis.
- D-SIIs refer to insurers of such size, market importance and interconnected domestically and globally, whose distress or failure would result in widespread disorganization of the domestic financial system.
- Thus, their continuous functioning is very important for the hassle free availability of insurance related services for the national economy.
- These, as the insurer, are ‘so large or important that they cannot be allowed to fail’.
Criteria for Determination of D-SIIs:
- Based on the size of the operations in respect of gross revenue including premiums for insurance undertaken and the value of the asset under management.
- Based on global activities in more than one jurisdiction.
Due to the importance of D-Slls, additional regulatory measures have been put in place to address issues of systemic risks and ethical hazards to them.
Similarly, the Reserve Bank of India identifies Systemically Important Domestic Banks (D-SIBs) or banks that “cannot be allowed to fail”.
SBI, ICICI and HDFC banks have been earmarked as D-SIBs for the year 2020-21.
Source – The Hindu