IRDA Current Affairs - 2020
On February 12, 2020, the Union Cabinet approved on capital infusion in three Public Sector Units namely United India Insurance Company (UIICL), Oriental Insurance Company Limited (OICL) and National Insurance Company Limited (NICL).
During the meet the cabinet also approved an immediate release of Rs 2,500 crores in order to address their critical financial position and also regulate their solvency requirements. The capital infusion is aimed at merging the three insurance companies in the future. Merging the companies will improve their operational efficiency and solvency ratio.
The step is being taken to make these companies meet the solvency ratio criteria of IRDA (Insurance Regulatory Development Authority)
The Solvency ratio is the key metric used to measure the ability of an enterprise to meet its debt obligation. It indicates if a company has sufficient cash flow in order to meet its long term and short-term liabilities.
It is the ratio between after-tax net operating income and total debt obligations.
Tags: Cabinet • Cabinet Approval • Debt • Insolvency • Insurance
The 20th Meeting of Financial Stability and Development Council (FSDC) was held under the Chairmanship of Smt. Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs.
Key Highlights of Meeting
The Meeting reviewed current global and domestic economic situation, overall macro-economic situation and financial stability issues including those concerning Banking and Non Banking Financial Company (NBFC).
Council was also informed about progress made towards setting-up of Financial Data Management Centre (FDMC) under the aegis of FSDC, so as to facilitate integrated data aggregation and analysis as also a Computer Emergency Response Team (CERT-Fin) towards strengthening cyber security framework for financial sector.
Council also held consultations to obtain inputs and suggestions of Financial Regulators for Union Budget 2019-20. All the regulators presented their proposals for upcoming Budget. The financial sector regulators includes- SEBI (Capital Market), RBI (Monetary Sector), IRDA (Insurance), PFRDA (Pension) and IBC (Insolvency & Bankruptcy).
Council also took note of activities undertaken by FSDC Sub-Committee which is chaired by Reserve Bank of India (RBI) Governor and action taken by Members on decisions taken in earlier Meetings of FSDC.
What is Financial Stability and Development Council?
The FSDC was constituted in December 2010. It is apex body of sectoral regulators and not a statutory body.
Objective: to strengthen and institutionalise mechanism for maintaining financial stability, promoting financial sector development and enhancing inter-regulatory coordination.
Function: Among other things, it deals with issues relating to financial stability, financial literacy, financial inclusion, financial sector development, inter–regulatory coordination and macro prudential supervision of economy which also includes functioning of large financial conglomerates. No separate funds are allocated to Council for undertaking its activities.
FSDC Sub-Committee: It deliberates on agenda items proposed by any member of FSDC Council which mainly include matters relating to financial stability, inter-regulatory coordination, and financial sector development.