IRDAI retains GIC Re, New India, LIC as D-SIIs

The Insurance Regulatory and Development Authority of India (IRDAI) has retained New India Assurance Company Limited, Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC Re) as Domestic Systemically Important Insurers (D-SIIs) for 2023-24.

LIC  is a life insurance company, but GIC Re and New India Assurance Company Limited are general insurance companies.

Life insurance refers to the insurance of the life of human beings. The insurance of the life of non-humans, such as animals, crops, etc., and non-living things like houses, buses, cars, etc., is known as general insurance.

What is Domestic Systemically Important Insurers (D-SIIs)

The insurance sector regulator IRDAI introduced the concept of Domestic Systemically Important Insurers (D-SIIs) in 2021-22. It identified three insurance companies, LIC, GIC Re and New India Assurance, as D-SIIs in 2021-22.

Domestic Systemically Important Insurers (D-SIIs) refer to insurance companies that are dominant players in the domestic market and interconnected with the global market. The failure of such insurance companies can destabilise the country’s financial system and cause significant dislocation.

Systemically important insurance companies attract closer supervision and regulation from the country's insurance regulators as these entities are considered too big to fail.

The companies included in the D-SIIs are expected to raise their level of Corporate governance and identify all relevant risks to promote a sound risk management framework and culture.

Life Insurance Company (LIC)

The Life Insurance Corporation of India (LIC) is owned by the government of India and is the largest life insurance company in India.

It is a statutory body created by the Life Insurance Corporation Act 1956. It was created on 1 September 1956 by the government of India after nationalising all the private life insurance companies in the country.

Its headquarters is in Mumbai, Maharashtra.

Chairperson: Siddhartha Mohanty

General Insurance Corporation of India (GIC Re)

The General Insurance Corporation of India was set up by the government of India in 1972 after the passage of the General Insurance Business (Nationalisation) Act 1972 .

Under the General Insurance Business (Nationalisation) Act of 1972, the government nationalised all the private general insurance companies operating in India.

In 2002, the government of India notified GIC Re as an Indian reinsurer. Reinsurance is insurance provided by an insurance company to other insurance companies to reduce risk.

Headquarters of GIC Re: Mumbai, Maharashtra

Chairman and Managing Director: Ramaswamy Narayanan

New India Assurance Company Limited 

It is a general insurance company that was established in 1919 as a private company by Sir Dorabji Tata. It was nationalised in 1972 by the government of India.

Initially, it was made a subsidiary company of the General Insurance Corporation of India.

In 2002, the ownership of New India Assurance Company Limited was transferred from GIC to the government of India.

Headquarters: Mumbai, Maharashtra.

Chairman cum Managing Director: Neerja Kapur 

Insurance Regulatory and Development Authority of India (IRDAI)  

The Insurance Regulatory and Development Authority of India (IRDAI) was established on the recommendation of the R.N. Malhotra Committee, which the government of India established on Insurance Sector reform in 1993.

In 1999, the Insurance Regulatory and Development Authority (IRDA) was established as an autonomous body under the Union Ministry of Finance.

Parliament passed the Insurance Regulatory and Development Authority Act 1999, which made the authority a statutory body in April 2000.

It was renamed the Insurance Regulatory and Development Authority of India on 26 December 2014.

It is the regulator of the Insurance sector in India

Chairperson: Debasish Panda.

Headquarters: Hyderabad, Telangana