Irdai sets up panel to identify systemically important insurers to enhance framework

Insurance regulator Irdai Wednesday set up a panel to identify domestically systemically important insurers (SII) and put in place an enhanced regulatory framework for them. Explaining the rationale for having enhanced regulatory watch for SIIs, Irdai said their failure has the potential to cause significant disruption to the essential services they provide to policyholders and to the overall economic activity in the country.

SIIs are perceived as insurers that are 'too big to fail'. "The continued functioning of SIIs is critical for the uninterrupted availability of uninterrupted insurance services to the real economy," said the Insurance Regulatory and Development Authority of India (Irdai).

The committee headed by Pravin Kutumbe, Member-Finance & Investment, Irdai, has been asked to submit a report in six months. As per the terms of reference, the panel has also to develop a paper on assessment methodology for SIIs in India and recommend enhanced supervision for them.