IRDAI forms two groups to align RBC framework with IndAS

It matters to citizens because it aims to create a consistent, transparent, and arbitrage-resistant solvency regime for insurers, which impacts the financial stability of insurance companies and the protection of policyholders.

Who it concerns: The order concerns the IRDAI, the insurance industry (specifically Life and Non-Life insurers), and the public as policyholders. The Working Groups are composed of representatives from specific insurers (e.g., LIC, HDFC Life, Bajaj General, ICICI Lombard), reinsurers (Munich Re, Swiss Re), the Institute of Actuaries of India, and IRDAI officials.

What the regulator ordered

• IRDAI has approved the constitution of two Working Groups (Life and Non-Life) to converge the RBC framework with IndAS.
• The approach will use IndAS financial statements as the starting point and basis for RBC, with defined adjustments where prudential objectives require.
• The Working Groups are tasked with preparing an Exposure Draft of the RBC Regulations and an associated Approach Paper.
• The Exposure Draft must cover definitions, valuation of assets/liabilities, determination of Available and Required Capital, solvency ratios, governance, reporting, and transitional provisions.
• The Approach Paper must include sensitivity testing, recommended ranges for assumptions, materiality thresholds, and specific treatments for discounting, flooring, risk margins, and illiquidity premiums.
• The Working Groups must complete their work and submit all deliverables within one month from the date of the Order (10 November 2026).
• Ms. Jamuna Choudhary and Mr. Parmeshwar Shelke are designated as Member Conveners for the Life and Non-Life Working Groups, respectively.
• All deliberations, data, and documents of the Working Groups are strictly confidential.

Also in the document

• The order states that running RBC and IndAS on separate bases would impose duplicative costs and create room for regulatory arbitrage.
• The Working Groups may hold joint sittings to ensure a single, consistent position for the industry.
• Participation through video-conferencing counts towards the quorum for meetings.
• The order references the 'Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers), (Amendment) Regulations, 2026' which were notified on 30th March, 2026.