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General Studies (Paper 1) from JKPSC JKAS 2022 Prelims
Subject: General Studies (Paper 1) Economy Jammu & Kashmir Public Service Commission Last updated May 9, 2026
JKPSC Prelims 2022 General Studies (Paper 1)

Consider the following statements regarding Domestic Systematically Important Insurers (D-SIIs) in India:

1. RBI nominates certain insurers as D-SIIs.
2. Currently LIC, GIC, New India Assurance Co. Ltd have been designated as D-SIIs in India.
3. D-SIIs are perceived as insurers that are 'too big or too important to fail' (TBTF).

The correct statement/s is/are:

Answer & Explanation

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Correct Answer: Option C — 2 and 3 only
Here is a breakdown of why each statement is correct or incorrect:

Statement 1 is Incorrect: D-SIIs are designated by the Insurance Regulatory and Development Authority of India (IRDAI), not the RBI. The RBI identifies Domestic Systemically Important Banks (D-SIBs), while IRDAI handles the insurance sector.

Statement 2 is Correct: As of the latest designations, the Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC Re), and New India Assurance Co. Ltd. are the three entities identified as D-SIIs.

Statement 3 is Correct: D-SIIs refer to insurers of such size, market importance, and domestic/global inter-connectedness that their distress or failure would cause a significant disruption in the domestic financial system. They are colloquially referred to as "Too Big or Too Important To Fail" (TBTF).

Understanding D-SIIs (Economy/Finance)
The concept of D-SIIs is rooted in maintaining financial stability. Because these companies are so deeply integrated into the economy, they are subject to enhanced regulatory supervision.

Key Features of D-SIIs:

Higher Capital Requirements: Because they are "Too Big To Fail," these insurers may be required to maintain higher levels of solvency margins to cushion against potential shocks.

Systemic Risk Management: They are expected to have robust internal governance structures to manage risks that could otherwise trigger a domino effect in the financial markets.

Annual Identification: IRDAI reviews the list of D-SIIs on an annual basis, assessing insurers based on parameters like size, inter-connectedness, and lack of substitutability.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
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JKPSC JKAS 2022 Prelims

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Exam JKPSC
Recruitment JKAS
Stage Prelims
Year 2022
Subject General Studies (Paper 1)
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