Starting from April 2024, the top 15 insurance companies in India are required to use a new accounting system called IND-AS. This is a big change for the insurance industry and is designed to make the way they report their financial information more similar to international standards.
However, the government-owned insurance companies, including LIC, are not part of this change for now. The goal is to help everyone understand the financial health of insurance companies better.
The new accounting system is based on IFRS-17 and will make insurance companies show their future cash flow estimates, the rates used to calculate them, and adjustments for non-financial risks more transparently. Also, how they report their revenue will change.
Preliminary Regulatory Program – Top 15 insurance companies
The regulator chose top 15 insurance companies with foreign partners or collaborations for this first phase. Some of them include ICICI Prudential Life, ICICI Lombard General, TATA AIG General, Niva Bupa Health, HDFC Life, and HDFC Ergo General, among others.
This move is happening because many other countries have already adopted IFRS 17 starting from January 2023.