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Irdai Establishes Working Groups to Align Risk-Based Capital Regime with Ind AS
Sentiment: NeutralHigh Priority
What Happened?
The Insurance Regulatory and Development Authority of India (Irdai) has formed two working groups to create a framework for aligning the risk-based capital regime with Indian Accounting Standards (Ind AS). The groups will prepare an exposure draft within a month.
Key points
- Irdai's working groups include representatives from both life and non-life insurers.
- The life insurance group is led by Jamuna Choudhary, while Parmeshwar Shelke leads the non-life group.
- The groups will ensure a consistent approach across the insurance industry.
- They will examine asset and liability valuation, capital determination, and risk modules.
- Recommendations must be backed by data and sensitivity testing.
Key insights
- The alignment with Ind AS may streamline compliance processes for insurers.
- A consistent approach could reduce regulatory arbitrage in the insurance sector.
- The working groups' recommendations may lead to significant changes in capital calculation methods.
Why it matters
This development could impact how insurers calculate capital requirements, affecting their financial stability.
Entities
Irdai· OrganizationJamuna Choudhary· PersonParmeshwar Shelke· PersonLIC· CompanySBI Life· CompanyHDFC Life· CompanyICICI Prudential Life· CompanyBajaj Life· CompanyTata AIA· CompanyKotak Life· CompanyBandhan Life· CompanyAditya Birla Life· CompanyMunich Re· CompanyInstitute of Actuaries of India· OrganizationNew India Assurance· CompanyICICI Lombard· CompanyBajaj General· CompanySBI General· CompanyTata AIG· CompanyNiva Bupa· CompanyIndusInd General· CompanyKiwi General· CompanySwiss Re· Company
Source
Business Standard
