Insurance regulator IRDAI has approved amendments requiring insurers to prepare and present financial statements in accordance with applicable Indian Accounting Standards, with the new framework set to take effect from April 1, 2026.
Framework Aims to Improve Reporting Standards
The introduction of Ind AS is intended to enhance consistency, transparency and comparability in financial reporting across the insurance sector, aligning it with globally accepted standards. IRDAI announced the approval of the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) (Amendment) Regulations, 2026.
The framework has been developed following extensive stakeholder consultations. This included consideration of public comments on the exposure draft and engagement with insurers and industry professionals.
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Transitional Provisions for Insurers
The regulations provide for parallel reporting for a period of two years, or as specified by IRDAI. During this phase, insurers will prepare financial statements under Ind AS alongside financial information based on the existing accounting framework.
This arrangement is aimed at allowing insurers to stabilise processes and controls, while enabling stakeholders to understand and assess the impact of the new accounting framework. For insurers facing challenges in shifting immediately to Ind AS, a one year forbearance provision has also been introduced. During this period, such insurers will continue to submit Ind AS based financial information to the Authority.
Broad Applicability Across Insurance Sector
The implementation of Ind AS will apply to all categories of insurers, including life, general, stand alone health insurers and reinsurers. The amendments outline the regulatory framework governing recognition, measurement, presentation and disclosure of financial statements under Ind AS.
Professional bodies including the Institute of Chartered Accountants of India and the Institute of Actuaries of India have welcomed the move and expressed readiness to support insurers, auditing professionals and actuaries in the transition.
