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Life Insurance Corporation of India (LIC), New India Assurance, and General Insurance Corporation of India (GIC) have been retained as Domestic Systemically Important Insurers (D-SIIs) for the 2023-24 financial year.
The designation was announced by the Insurance Regulatory and Development Authority of India (IRDAI).
D-SIIs are insurers whose size, market importance, and interconnectedness are such that their distress or failure could significantly disrupt the domestic financial system.
These designated insurers are subject to enhanced regulatory supervision to ensure their financial soundness and stability.
D-SIIs are insurance companies identified by national regulatory authorities (like IRDAI in India) as being so critical to the domestic financial system that their potential distress or failure could lead to significant disruption across the financial sector and the broader economy. They are often referred to as 'too big to fail' entities, necessitating stricter regulatory scrutiny to ensure their resilience and stability.
Simple Analogy: Think of D-SIIs as the major pillars supporting a large building (the financial system). If one of these pillars weakens or collapses, the entire structure is at risk. Regulators therefore monitor these pillars very closely to prevent any structural damage.
An autonomous, statutory body tasked with regulating and promoting the insurance and re-insurance industries in India. Its primary objectives include protecting policyholders' interests and ensuring the orderly growth of the insurance sector.
Similar to D-SIIs, D-SIBs are banks identified by the Reserve Bank of India (RBI) as being 'too big to fail.' Currently, SBI, ICICI Bank, and HDFC Bank are designated as D-SIBs. Both D-SIIs and D-SIBs fall under the broader category of Systemically Important Financial Institutions (SIFIs), which are subject to enhanced global regulatory scrutiny to prevent systemic risks.
The FSB, an international body, coordinates global efforts to promote financial stability. It plays a key role in developing policies for Systemically Important Financial Institutions (SIFIs), including insurers, to mitigate risks to the global financial system.
GS Paper III: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Government Budgeting. Investment models. Financial Markets.
General Awareness: Indian Economy, Financial Institutions, Regulatory Bodies.
Financial Awareness: Banking and Financial Institutions, Regulatory Bodies, Economic Concepts.
General Knowledge: Basic Economic Concepts, Important Institutions.
Consider the following markets: 1. Government Bond Market 2. Call Money Market 3. Treasury Bill Market 4. Stock Market How many of the above are included in capital markets?
Answer: Only two
With reference to the Indian economy, consider the following statements: 1. A share of the household financial savings goes towards government borrowings. 2. Dated securities issued at market-related rates in auctions form a large component of internal debt. Which of the above statements is/are correct?
Answer: Both 1 and 2
Which of the following organizations brings out the publication known as World Economic Outlook?
Answer: The International Monetary Fund
Medium (annual declaration, but the underlying concept of systemically important institutions is a recurring theme in economic and financial awareness sections).
Domestic Systemically Important Insurer
Insurance Regulatory and Development Authority of India
The risk of collapse of an entire financial system or market, as opposed to the failure of individual entities within it.