EDEN IAS

NEWS IMPULSE – DOMESTIC SYSTEMICALLY IMPORTANT INSURERS (D- SLLs)| 28 SEPTEMBER

<p style=”margin-bottom: 13px; text-align: center;”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:115%”>SOURCE &ndash; THE HINDU</span></span></b></span></span></span></p>

<p style=”margin-bottom: 13px; text-align: center;”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:115%”>GS PAPER &ndash; 3</span></span></b></span></span></span></p>

<hr />
<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:115%”>CONTEXT</span></span></b><span style=”font-size:12.0pt”><span style=”line-height:115%”> – The regulator&rsquo;s move has come ahead of the government plan to list the shares of LIC on the stock exchanges through an initial public offering (IPO) next year. GIC Re and New India are already listed on the exchanges.</span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><b><span style=”font-size:12.0pt”><span style=”line-height:115%”>KEY FACTS</span></span></b><span style=”font-size:12.0pt”><span style=”line-height:115%”> &ndash;</span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:115%”>The insurance regulator said Domestic Systemically Important Insurers (D-SIIs) refer to insurers of such size, market importance and domestic and global inter connectedness whose distress or failure would cause a significant dislocation in the domestic financial system.</span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:115%”>The continued functioning of D-SIIs is critical for the uninterrupted availability of insurance services to the national economy.</span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:115%”>&nbsp;D-SIIs are perceived as insurers that are &lsquo;too big or too important to fail</span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:115%”>In order to identify such insurers and to put such insurers to enhanced monitoring mechanism, IRDAI developed a methodology for identification and supervision of D-SIIs. </span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:115%”>The parameters, as per the methodology for identification of D-SIIs include the size of operations in terms of total revenue, including premium underwritten and the value of assets under management, global activities across more than one jurisdiction, lack of substitutability of their products and/or operations and interconnectedness through counterparty exposure and macro-economic exposure</span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:115%”>These parameters were assigned weights to cover various aspects of their operations. </span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:115%”>The Authority would identify D-SIIs on an annual basis and disclose the names of these insurers for public information</span></span></span></span></span></p>

<p style=”margin-bottom:13px”><span style=”font-size:11pt”><span style=”line-height:115%”><span style=”font-family:Calibri,sans-serif”><span style=”font-size:12.0pt”><span style=”line-height:115%”>&nbsp;D-SIIs will also be subjected to enhanced regulatory supervision</span></span></span></span></span></p>

<p style=”margin-bottom:13px”>&nbsp;</p>