Facts for Prelims (FFP)
Source: Economic Times
Context: In the financial year 2023-24, three domestic insurance companies have been identified as systemically important for the stability of the economy:
- Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), and New India Assurance Co. Ltd.
- These companies are considered “too important to fail,” and there is an expectation of government support in case of financial distress.
- Designated as Domestic Systemically Important Insurers (D-SIIs), they play a critical role in ensuring the availability of insurance services to the national economy.
- D-SIIs are subject to additional regulatory measures to manage systemic risks and moral hazard issues, including enhancing corporate governance and implementing robust risk management frameworks.
