Top 15 Insurance firms to adopt IND-AS from April

The insurance sector is set for a game-changing development with the IRDAI asking the top 15 companies, across life and non-life, to adopt the new IND-AS accounting framework from April 1, 2024 (FY25), sources told.

This is the first such partial roll-out of accounting standards for the insurance industry in many decades, and the move is aimed at bringing Indian accounting practices closer to global standards. This is expected to help stakeholders understand insurers’ risk exposure, profitability, and financial position accurately.

Designed in coordination with IFRS-17, the revised standard under IND-AS 117 will mandate insurers to explicitly declare unbiased estimates of future cash flows, discount rates reflecting the contracts’ cash flows, and adjustments for non-financial risk. Further, revenue will no longer be equal to written premiums but to the change in contract liability.

The insurance regulator has identified 15 companies that have foreign equity partners and/or strategic collaborations for the purpose. The reason here is that these entities may have estimates of the financials as per parallel IFRS-17 for their consolidated balance sheets, which need to be presented on their foreign partner’s home turf. According to sources, some of the companies identified for the pilot phase include ICICI Prudential Life, ICICI Lombard General, TATA AIG General, Niva Bupa Health, HDFC Life, and HDFC Ergo General, among others.