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. Its 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.