IRDAI forms working groups on risk-based capital framework convergence with IndAS

The objective, of the working groups, will be to achieve a coherent convergence of the RBC framework with IndAS so that a single set of underlying data, models and assumptions of the valuation framework serves as the base. File image by snowing on Magnific Financial statements prepared as per Indian Accounting standards (IndAS) will be the basis for the Risk Based Capital (RBC) framework proposed for insurers in India, according to insurance regulator IRDAI.IndAS statements will form the starting point and basis for RBC, with clearly defined, transparent and evidence-based adjustments, wherever prudential objectives of RBC is necessary, the Insurance Regulatory and Development Authority of India said, announcing the constitution of a working group each for life and non-life insurers.The objective, of the working groups, will be to achieve a coherent convergence of the RBC framework with IndAS so that a single set of underlying data, models and assumptions of the valuation framework serves as the base. The resulting RBC framework will be transparent, comparable across insurers, resistant to arbitrage, proportionate and implementable within a realistic transition path, IRDAI said.The regulator has set in motion the process of transitioning the Indian insurance sector from the factor-based solvency regime to the RBC framework, under which capital requirement of an insurer has to be commensurate with the risks it carries, measured on an economic (market-consistent) balance sheet. Earlier this year, it advised insurers to prepare and present financial statements in accordance with IndAS with effect from April 1, 2026.In the communication, on the working groups, IRDAI said having separate, unconnected bases would impose duplicative costs on insurers, introduce reconciliation complexity and create room for inconsistent outcomes and regulatory arbitrage. Convergence will neither dilute the prudential purpose of RBC (policyholder protection at a defined confidence level) nor distort Ind AS objectives (faithful representation), it said.Preparing an exposure draft of the RBC regulations and an associated approach paper figure among the deliverables for the Working Groups, all within one month, IRDAI CGM (Actuarial & RBC) C. Srinivasa Kumar said in the communication. Published - November 11, 2026 11:00 am IST