Irdai names LIC, GIC as 'domestic systemically important' insurers

These were the same institutions that were identified as DSII in 2021-22

BS Reporter
Opting for EMI on health insurance premiums? You may end up paying more

Listen to This Article

Insurance regulator on Friday identified Life Insurance Corporation (LIC), New India Assurance, and General Insurance Corporation (GIC Re) as domestic systemically important insurers (D-SIIs) for 2022-23. 
These were the same institutions that were identified as DSII in 2021-22. 

D-SIIs refer to insurers of such size, market importance, and domestic and global interconnectedness, whose distress or failure would cause a significant dislocation in the domestic financial system. 
Therefore, the continued functioning of D-SIIs is critical for the uninterrupted availability of insurance services to the national economy, Insurance Regulatory and Development Authority of India said. 

Since these institutions have been identified as D-SIIs, they have to raise the level of corporate governance; identify all relevant risks and promote a sound risk management framework and culture.
D-SIIs, typically, are subjected to additional regulatory measures to deal with systemic risks and moral hazard issues.

Also Read

Life insurers' new biz premium growth eases to 10% as LIC loses pace

New tax norm to hurt insurers; stocks attractive for the long run: Analysts

LIC shares surge 9% as profit soars 11-fold in Q2 to Rs 15,952 crore

Irdai endorses panel's view to cut obligatory cession to zero from 4%

LIC extends losing streak to 7th straight session, hits record low

World's richest man eyes India's luxury market with landmark Dior show

India a mature real estate market with $5 bn fund flows per year: McDonald

Core sector output slows to 3-month low of 6% in Feb, crude production dips

Revenue growth of IT firms in FY24 to be 7-9% lower than FY23: CRISIL

India objects to $280-billion US programme to promote chipmaking

Generally, D-SIIs are perceived as insurers that are ‘too big or too important to fail’. “This perception and perceived expectation of government support may amplify risk-taking, reduce market discipline, create competitive distortions, and increase the possibility of distress in the future”, Irdai said.

First Published: Mar 31 2023 | 10:48 PM IST

Explore News