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IRDAI – Clarifications on implementation of Indian Accounting Standards (Ind AS)

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  • IRDAI – Clarifications on implementation of Indian Accounting Standards (Ind AS)

The Insurance Regulatory and Development Authority of India (“ IRDAI/ Authority” ) has issued a circular on clarifications on implementation of Indian Accounting Standards (“ Ind AS” ) bearing reference number IRDAI/IFRS/CIR/MISC/45/4/2026, dated April 1, 2026 ( “Circular” ). The Circular has been issued pursuant to the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) (Amendment) Regulations, 2026, (“ Regulations 2026” ) providing for implementation of Indian Accounting Standards (Ind AS) by insures. which shall come into force dated April 01, 2026.

The clarification is issued to provide clarity on certain operational, accounting and regulatory aspects arising during the course of implementation and based on feedback received from stakeholders, to ensure uniformity in implementation across the industry.

The key highlights of the Circular are as follows:

  • Financial Statements under Ind AS: Financial Statements shall be prepared in accordance with Schedule IIA and form the basis of financial reporting, with mandatory parallel reporting (Ind AS and existing framework) for two years. Insurers are required to undertake quarterly preparation, submission and disclosure of Financial Statements and Financial Information, subject to limited review (quarterly) and audit (annual), along with reconciliation requirements under Ind AS 101 and prescribed timelines (including SEBI norms for listed insurers). The Financial Statements and Financial Information shall be disclosed on the website of the insurer.
  • Forbearance – Submission Requirements and Monitoring: Insurers seeking one-year forbearance shall submit an application by April 30, 2026, along with a Board-approved implementation plan, including detailed roadmap and governance framework, and shall furnish monthly progress reports to the Authority.
  • Reporting during forbearance period: During the forbearance period, Financial Statements shall be prepared under Schedule II, while Ind AS-based Financial Information shall be prepared and submitted separately, with quarterly reporting, review, certification and disclosure requirements. For the financial year 2026–27, the Financial Statements and Financial Information for the first three quarters shall be submitted within a period of three months from the end of the respective quarter. However, for listed insurers, timelines for disclosures of Financial Statements will continue as SEBI norms.
  • Segregation of Policyholder and Shareholder Funds: Segregation of policyholder and shareholder funds shall continue in accordance with Section 11 of the Insurance Act, 1938, with appropriate presentation under Ind AS as per Schedule IIA of Regulations 2026.
  • Actuary Report, Surplus and Solvency Framework: Actuarial reporting, surplus distribution and solvency requirements shall continue to be governed by Sections 13, 49, 64V and 64VA of the Insurance Act, 1938, and adoption of Ind AS shall not alter these principles. All references to Schedule – II appearing in Schedule – I of the Regulations shall continue to be applicable without any change till further instruction.
  • Discount Rate: Discounting of insurance contract liabilities shall be carried out in accordance with Ind AS 117, with risk-free rate derived from Government of India securities based on Clearing Corporation of India Limited (CCIL) zero-coupon yield curve or such other sources as may be specified.
  • Independent Validation: The scope and manner of independent validation of Ind AS implementation shall be specified by the Authority in consultation with the Joint Expert Group constituted under Regulations 2026.
  • Applicability of Schedule – II to the related Regulatory frameworks: Existing regulatory provisions relating to investment functions, expenses of management, submission of returns and public disclosures shall continue to be governed by Schedule II of Regulations, unless otherwise modified. Insurers shall ensure that the principles and requirements specified under the Schedule – II are consistently applied while complying with the aforesaid regulatory frameworks, unless otherwise specifically modified or clarified by the Competent Authority.

Further, the Authority has clarified that any clarifications or issues faced during implementation of Ind AS may be communicated to it at the email id indas-team@irdai.gov.in.

A copy of the Circular has been attached herewith for your ready reference.

Source category: IRDAI

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