D-SIIs for 2021-22

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31 December 2021 Current Affairs:The state-owned LIC, GIC, and New India Assurance Co. were identified by the Insurance Regulatory and Development Authority of India (IRDAI) on 30 December.

Highlights

  • D-SIIs are insurers of such size, market importance, and domestically and globally interconnectedness that their failure or distress will cause significant financial system disruption in their home country.
  • D-SIIs is seen as insurance companies that are “too big or too important to fail” (TBTF).
  • This perception and expectation of government assistance may weaken market discipline, increase risk-taking, create competitive distortions, and increase the risk of future distress.
  • As a result, the continued operation of D-SIIs is required to ensure the continuous availability of insurance services for the national economy.
  • IRDAI identifies D-SIIs on an annual basis and makes the names of such insurers public. Insurers in the public sector are required to improve their corporate governance.
  • They have the responsibility of identifying all relevant risks and promoting a sound risk management culture. They are subject to the IRDAI’s enhanced regulatory oversight.

Insurance Regulatory and Development Authority of India

  • IRDAI is a regulatory body, working under the jurisdiction of the 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. IRDAI has 10-members, including the chairman, 5 full-time and 4 part-time members appointed by the Central government.

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