The Insurance Regulatory and Development Authority of India (IRDAI) proposes to implement Indian Accounting Standards (Ind AS) for all insurers with effect from 1 April 2026.
Ind AS are a set of accounting standards that harmonise Indian financial reporting with International Financial Reporting Standards (IFRS).
In a statement, the regulator said that the proposed effective date shall be applicable to all categories of insurers, including life insurers, general insurers, health insurers and reinsurers.
For the purpose of adopting Ind AS, it is necessary to suitably revise the regulatory framework to ensure alignment with the new accounting standards, said the IRDAI. Accordingly, an “Exposure Draft of the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) (Amendment) Regulations, 2026” is proposed. In conjunction with the exposure draft, the regulator released a detailed consultation paper.
The exposure draft sets out the proposed regulatory framework governing the recognition, measurement, presentation and disclosure of financial statements by insurers adopting Ind AS. The goal is to promote greater consistency, transparency and comparability in financial reporting across the insurance sector, in alignment with globally accepted standards, while preserving regulatory prudence and safeguarding policyholder interests.
The framework has been developed after comprehensive engagement with insurers, including structured gap assessments and analysis of pro-forma financial submissions, to evaluate operational readiness and the impact assessment. These measures are intended to facilitate a smooth and orderly transition to Ind AS-based financial reporting.
Consultation paper
The consultation paper outlines economic and business objectives of transition to Ind AS, industry preparedness, key policy considerations, the proposed implementation approach, transitional arrangements and the required amendments to regulations. It also sets out specific questions on key aspects of the proposed implementation and invites constructive feedback from all stakeholders.
Industry readiness and preparatory measures
IRDAI has adopted a structured and phased readiness approach to Ind AS since 2022, including the constitution of a Mission Mode Team and an Ind AS Expert Committee, mandatory gap assessments, capacity-building initiatives, and submission of Ind AS-compliant proforma financial statements.
Insurers conducted gap assessments covering data, systems, and resources, and have made significant progress in system upgrades, Contractual Service Margin (CSM) engine development and capacity building. Insurers across all phases have submitted proforma statements for the financial year ended 31 March 2024 (FY2024), with most of the large insurers also for FY2025. Also, an impact assessment is carried out to understand the financial implications of Ind AS.
Hence, the IRDAI proposes the implementation of Ind AS with effect from 1 April 2026. For the first year of implementation, insurers shall obtain independent validation of the Ind AS financial statements from an IRDAI-empanelled list of auditors in addition to the statutory audit of the financial statements.
IRDAI invites public comments, including insurers, industry associations, professional bodies, actuaries, auditors and other interested entities, on the exposure draft. The deadline for feedback is 24 March.