IRDAI’s new insurance accounting rules from April 1 will see insurers adopt Ind AS standards, marking a major shift in how insurance companies report finances, though policyholders are unlikely to see immediate changes in premiums or benefits.
Key Highlights
- IRDAI mandates Ind AS accounting from April 1, improving transparency in insurers’ financial reporting.
- Policyholders see no direct impact on premiums, benefits, or claims under new insurance rules.
From April 1, 2026, the Insurance Regulatory and Development Authority of India (IRDAI) has proposed implementing Indian Accounting Standards (Ind AS) across all insurers, including life, general, health, and reinsurance companies.
This transition aligns India’s insurance sector with global accounting frameworks like IFRS, particularly Ind AS 117 for insurance contracts, bringing greater transparency and comparability in financial reporting.
What is changing?
The new rules fundamentally change how insurers recognize revenue, value liabilities, and report profits. Instead of booking premiums upfront, insurers will recognize income over the life of a policy, reflecting actual service delivery.
Additionally, insurers will need to upgrade systems and processes, with parallel reporting under both old (IGAAP) and new (Ind AS) frameworks in the first year to ensure a smooth transition.
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Experts emphasize that there will be no direct impact on policyholders in terms of:
- Premiums
- Policy benefits
- Claims process
“Policyholders may not see any major direct change… however, financial reporting will become more transparent,” said Tijo Joseph, CFO at Anand Rathi Insurance Brokers.
The shift is aimed at:
- Improving transparency and investor confidence
- Making insurers’ financials globally comparable
- Strengthening governance and risk management
Over time, this could indirectly benefit customers by ensuring financially stronger and more stable insurers.
