LIC, GIC Re, New India continue to be D-SIIs for 2023-24: IRDAI

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The Insurance Regulatory and Development Authority of India (IRDAI) has identified three Domestic Systemically Important Insurers (D-Slls) for the year 2023-24.

“Life Insurance Corporation of India,  General Insurance Corporation of India and New India Assurance Co Ltd continue to be identified in the 2022-23 list of D-Slls,’‘ the insurance regulator said in a release on Wednesday. 

D-Slls 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-Slls is critical for the uninterrupted availability of insurance services to the national economy,’‘ IRDAI said. 

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D-Slls are perceived as insurers that are ‘too big or too important to fail’ (TBTF). 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. 

These considerations require that D-Slls be subjected to additional regulatory measures to deal with systemic risks and moral hazard issues.

Given the nature of their operations and the systemic importance of the D-Slls, these insurers have to raise the level of corporate governance and are being subjected to enhanced regulatory supervision.