Page 52 - Insurance Times January 2018 Sample

the pre-resolution phase and the requirement to modify trusts of Asset Reconstruction Companies (ARCs),
the clause on preferential treatment of domestic bringing in 5/25 Scheme to extend long tenor loans to
creditors over foreign creditors. The Bill attempts to infrastructure projects, take-out finance, flexible
revamp and strengthen the deposit insurance structuring etc.
framework in India, by providing for faster and stricter 13. Recognizing that cyber security is critical for
timelines for payment, and shifting to a risk-based safeguarding the integrity and stability of the financial
premium framework for charging premiums from banks.
sector, Government has decided to set up a Computer
With regard to bail-in, as the Report rightly points out,
Emergency Response team for the Indian Financial
India currently has no provision for the same, and Sector (CERT-Fin), which will work in close co-ordination
believes that only a consensual, hybrid form with both with all financial sector regulators and other
statutory and contractual forms of bail-in may be
stakeholders and initiatives in this regard are already
suitable for the country. The Bill also distinguishes, to under way.
the extent possible, the roles and responsibilities of the
regulators and the resolution authority. Any duplication 14. The recommendations in case of India FSAP are mainly
to bring about further improvements in the structure
in their function is both unavoidable, and necessary, for
and functioning of the financial system and many of the
the effective monitoring of distressed financial firms. On
detailed recommendations are in sync with the
the issue of cross border co-ordination, the Bill gives
authorities’ own developmental plans.
flexibility to recognise or adopt support measures of
foreign resolution actions through bilateral agreements, 15. As a member of the FSB, BCBS, IOSCO, IAIS and IMF,
in the absence of which, in line with the prudential India actively participates in post-crisis reforms of the
regulations in place in India, the creditors of the branch international regulatory and supervisory framework
office in India, of a parent body established outside under the aegis of the G20. India remains committed
India would have first charge on the assets of the to adoption of international standards and best
specified service provider for the purpose of resolution practices, in a phased manner, calibrated to domestic
or liquidation under the Bill. The FRDI Bill, 2017 is needs and economic conditions, wherever necessary.
presently under the consideration by a Joint The FSSA released by IMF can be accessed here
Parliamentary Committee.
The FSA released by World Bank can be accessed here
11. On the need for modernising insurance solvency
framework and further development of risk-based (Dr. C.S.Mohapatra)
supervision, IRDAI is already taking steps by drawing a Adviser (FS)
road map on the implementation of risk based capital
(RBC) system in India and is in the process of formulating Insurance Regulatory and Development
an overall strategy to develop an appropriate “Risk
Based Supervisory Framework” for effective and Authority of India
efficient monitoring and evaluation of potential risks in Date: 20-12-2017
the insurance sector. On 21 Sep 2017, IRDAI has already
formed a ten-member steering committee to Insurance Regulatory and Development Authority of India’s
implement the Risk Based Capital (RBC) Regime in Head Office will be shifted to its own premises with effect
accordance with the recommendation of Risk Based from 26.12.2017 at the following Address.
Capital Committee Report.
12. Government has also taken various steps to enhance Address:
investment in infrastructure sector including launching Insurance Regulatory and Development Authority of India
of innovative financial vehicles such as Infrastructure Sy. No. 115/1
Debt Funds (IDFs), Real Estate Investment Trusts (REITs)/ Financial District
Infrastructure Investment Trust (InvITs), National Nanakramguda, Gachibowli
Infrastructure Investment Fund (NIIF), laying down a Hyderabad - 500 032
framework for municipal bonds, allowing complete pass Tel: 040-20204000
through of income tax to securitization trusts including This is for the information of all concerned.

52 The Insurance Times, January 2018

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