The Insurance Regulatory and Development Authority of India (Amendment) Regulations, 2026 introduce a structured transition to Indian Accounting Standards (Ind AS) for insurers, effective from publication or April 1, 2026. The regulations mandate preparation of financial statements in compliance with Ind AS to ensure a true and fair view, supported by detailed disclosures, standardized formats, and governance requirements. A key feature is the insertion of Schedule IIA, which outlines comprehensive rules on financial reporting, actuarial alignment, risk disclosures, and management reporting across all insurance segments. The framework preserves distinctions between policyholder and shareholder funds and clarifies that Ind AS profits are not distributable surplus. Transitional flexibility is provided through a one-year forbearance option subject to regulatory approval, action plans, and continuous reporting obligations. Insurers must also submit parallel financial statements during transition, ensure independent validation, and adhere to strict timelines, enhancing transparency, comparability, and regulatory oversight in the insurance sector.
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA
NOTIFICATION
Hyderabad, the 30th March, 2026
Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers), (Amendment) Regulations, 2026
F. No. IRDAI/Reg/2/216/2026.—In exercise of the powers conferred by clauses (f), (g), (h), (i), (ia), (ib), (y), (z), (za), (zd) and (zab) of sub-section (2) of section 114A, Sections 11, 13, 20, 27, 28, clause (a) of sub-section of section 29, 49, 64V, and 64VA of the Insurance Act, 1938, (4 of 1938) and section 14 and 26 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations to amend IRDAI
(Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, namely:
1. Short Title and commencement:
(1) These Regulations may be called the Insurance Regulatory and Development Authority of India (Actuarial, Finance and Investment Functions of Insurers), (Amendment) Regulations, 2026
(2) These Regulations shall come into force from the date of their publication in the official gazette or 1st April, 2026 whichever is later.
2. Objectives: The key objective of these regulations is to ensure that:
(1) The financial statements are prepared and reported in accordance with applicable Indian Accounting standards (Ind AS), principles and policies to provide a true and fair view of state of affairs of the insurer.
3. In Chapter – II after sub regulation (2) in regulation 6 of Insurance Regulatory And Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, the following shall be inserted, namely:-
“(2A) Schedule – IIA: Ind AS Finance Functions”
4. In Chapter – II after regulation 6 of Insurance Regulatory And Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, the following shall be inserted, namely:-
“6A Power to exercise forbearance for preparation of Ind AS financial statements
(1) The Competent Authority may, having regard to the preparedness of the insurer, the complexity of transition and such other factors as may be considered relevant, exercise forbearance in respect of insurer who is unable to prepare and present financial statements in compliance with Indian Accounting Standards. Such forbearance may be granted for one year by the Competent Authority:
Provided the request for forbearance shall be made on or before 30th April, 2026.
(2) The Competent Authority may, having regard to the readiness of systems, processes, and governance framework of the insurer, permit such insurer to continue to prepare financial statements in accordance with Schedule – II to these regulations for one year, subject to submission of a Board-approved action plan detailing preparations for implementation of Ind AS.
(3) The insurer shall furnish, as part of such action plan, a detailed roadmap for transition to Ind AS, including monthly milestones, timelines for system and data readiness, status of actuarial and finance function preparedness and the governance framework to ensure timely implementation.
(4) During the period for which forbearance is granted, the insurer shall also prepare and submit to the Authority financial information in accordance with Schedule – IIA of these regulations on a quarterly basis.
(5) The grant of forbearance under this regulation shall be subject to submission of monthly progress report of the preparation and the condition that the insurer shall achieve full compliance with Ind AS within one year.”
5. In Insurance Regulatory And Development Authority of India (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024, after Schedule – II, “Schedule – IIA: Ind AS Finance Functions” shall be inserted as under:-
“SCHEDULE – IIA: IND AS FINANCE FUNCTIONS
Part I: Preparation of Ind AS financial statements and management report of all insurers
1. Applicability
(1) This part of regulations shall be applicable to all the insurers including life insurers, general insurers, health insurers and re-insurers.
2. Definitions
(1) “Indian Accounting Standards” or “Ind AS” means the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time;
3. Accounting Principles for Preparation of Ind AS Financial Statements:
(1) Applicability of Indian Accounting Standards – Every Balance Sheet, Statement of Changes in Equity, Statement of Profit and Loss and Receipts and Payments Account of an insurer shall be in conformity with the Indian Accounting Standards to the extent applicable to insurers carrying on insurance business.
(2) The minimum disclosure requirements in the Ind AS Financial Statements comprise of:
i. Balance Sheet (Statement of Financial Position)
ii. Statement of Changes in Equity
iii. Statement of Profit and Loss, comprising:
a. Profit or Loss, and
b. Other Comprehensive Income (OCI)
iv. Receipts and Payments Account (Statement of Cash Flows)
v. Revenue Account
vi. Notes to the Ind AS Financial Statements including:
a. Material accounting policies
b. Other explanatory information
(3) Ind AS Financial Statements shall reflect true and fair picture of the financial condition of the insurer.
(4) The Ind AS Financial Statements formats and disclosures required under these Regulations shall be prepared in such form and manner, and in accordance with such formats, as specified and through subsidiary instructions, issued from time to time.
4. Key Policy Positions
Without prejudice to the interests of policyholders, following policy positions shall be adopted to ensure alignment between Ind AS and the Insurance Act, 1938:
(1) Policyholder and Shareholder Funds
i. Ind AS Financial Statements (Balance Sheet, Statement of Changes in Equity, Statement of Profit and Loss and Receipts and Payments Account) shall be prepared at the entity level in accordance with Ind AS.
ii. A separate Revenue Account for the Policyholder Fund shall be prepared to comply with Section 11 of the Insurance Act, 1938.
iii. Separate disclosure of Policyholder and Shareholder funds shall be provided through schedules forming part of the Ind AS Financial Statements.
iv. Maintenance of separate accounts for Policyholder and Shareholder funds shall continue as mandated under the Insurance Act, 1938.
(2) Annual Cohort Requirement
i. Insurers shall comply with the annual cohort requirement under Ind AS 117, including for participating insurance contracts.
ii. Transition relief, where applicable, shall be applied in accordance with Ind AS 117 provisions.
(3) Distribution of Surplus
i. Actuarial surplus determined under Section 49 of the Insurance Act, 1938 shall remain the basis for distribution of surplus to policyholders and shareholders.
ii. Profit recognised under Ind AS 117 is accounting profit for financial reporting purposes and shall not be treated as distributable surplus.
iii. Appropriate disclosures, including reconciliation between actuarial surplus and Ind AS profit, shall be provided to ensure transparency.
5. Parallel Submission during transition phase
(1) During the first two years from the date of implementation or for such period as may be specified by the Competent Authority, every insurer shall furnish for the same reporting period:
i. Financial Statements prepared in accordance with the Indian Accounting Standards (Ind AS) framework in the form and manner specified in this Schedule – IIA; and
ii. Financial information prepared in accordance with Schedule – II of these regulations, which shall be disclosed on the website of the insurer.
6. Constitution of Joint Expert Group on Ind AS
(1) For the purpose of examining and addressing issues arising in the course of implementation of the Indian Accounting Standards by insurers, a Joint Expert Group may be constituted by the Competent Authority.
(2) The Joint Expert Group may comprise of:
i. Whole time Member (Finance and Investment), IRDAI (Chair)
ii. Two representatives nominated by the Institute of Chartered Accountants of India;
iii. Two representatives nominated by the Institute of Actuaries of India;
iv. One representative nominated by the Securities and Exchange Board of India;
v. One representative nominated by the National Financial Reporting Authority;
vi. Such other person as may be necessary; and
vii. Head of Department (Finance and Investment), IRDAI shall act as the Member-Convener.
(3) The functioning and procedural aspects of the Joint Expert Group shall be as specified by the Competent Authority from time to time.
(4) The Joint Expert Group shall remain in force for a period of two years or for such extended period as may be specified by the Competent Authority.
7. Independent Validation:
(1) During the first year of implementation of the Indian Accounting Standards, or for such period as may be specified by the Competent Authority, every insurer shall obtain independent validation of process adopted in implementation of Ind AS. The scope and manner of such validation may be specified by the Competent Authority.
8. Preparation of Ind AS Financial Statements for Segregated Funds (Linked Business):
(1) All insurers carrying on life insurance business shall prepare separate set of Ind AS Financial Statements, for each segregated fund of the linked businesses and these shall be annexed with Ind AS Financial Statements.
(2) Segregated funds represent funds maintained in accounts to meet specific investment objectives of policyholders who bear the investment risk. Investment income/gains and losses generally accrue directly to the policyholders. The assets of each account are segregated and are not subject to claims that arise out of any other business of the insurer.
9. Disclosures Forming Part of Ind AS Financial Statements
A. In respect of material accounting policies and judgements in applying Ind AS including methodologies and key assumptions, the following disclosures shall be made in the notes to accounts in accordance with the requirements of the Ind AS:
(1) Identification and scope of Ind AS 117
(2) Combination of insurance contracts
(3) Separating components from an insurance contract
(4) Level of aggregation
(5) Recognition
(6) Measurement of insurance contracts
i. Fulfilment cash-flows
ii. Discount Rate
iii. Risk adjustment
iv. Contractual Service Margin
v. Contract boundary
vi. Coverage units
vii. Others (to be specified)
(7) Onerous Contracts
(8) Premium allocation approach
(9) Insurance acquisition cash flows
(10) Reinsurance Contracts held
i. Recognition
ii. Measurement
iii. Premium allocation approach
iv. Others (to be specified)
(11) Investment contracts with discretionary participation features
(12) Modification and derecognition
(13) Insurance finance income or expenses
(14) Risks arising from contracts within the scope of Ind AS 117, along with sensitivity analysis,
i. Insurance risk
ii. Financial risk including credit risk, liquidity risk & market risk
iii. Concentrations of risk
(15) Financial Instruments
i. Classification
ii. Measurement
iii. Impairment
iv. Derivatives
v. Others (to be specified)
(16) Leases
(17) Operating expenses relating to insurance business: basis of allocation and apportionment of expenditure to various segments of business
(18) Transition approach
(19) Taxation including impact due to change in Accounting Policy/ Adoption of Ind AS
(20) Any departure from the accounting policies required by Ind AS shall be separately disclosed with reasons for such departure.
(21) Any changes in the assumptions from the previous Ind AS Financial Statements shall be specified along with the justification and its financial impact.
(22) All other applicable accounting policies and disclosures as required by Ind AS shall be disclosed.
B. The following information shall also be disclosed for Life insurance business by way of notes:
(1) Contingent Liabilities:
i. Partly-paid up investments
ii. Underwriting commitments outstanding
iii. Claims, other than those under policies, not acknowledged as debts
iv. Statutory demands/liabilities in dispute, not provided for
v. Reinsurance Obligations to the extent not provided for in accounts
vi. Others (to be specified).
(2) Encumbrances to assets of the company in and outside India.
(3) Commitments made and outstanding for Loans, Investments and Fixed Assets.
(4) Claims settled and remaining unpaid for a period of more than six months as on the Balance Sheet date.
(5) Value of contracts in relation to investments, for:
i. Purchases where deliveries are pending;
ii. Sales where payments are overdue.
(6) Computation of managerial remuneration.
(7) Historical costs of those investments valued on fair value basis.
(8) Basis of revaluation of investment property.
(9) Provisions made for policy cancellations during free look period in current year and previous year duly certified by the appointed actuary.
(10) Disclosure that contributions made by the shareholders to the Policyholders’ A/c are irreversible in nature, and shall not be recouped to the shareholders at any point of time in future with reference to the general meeting of the insurer at which such prior approval of the shareholders has been obtained.
(11) Investments made in accordance with any statutory requirement should be disclosed separately together with its amount, nature, security and any special rights in and outside India.
(12) Segregation into performing/non-performing investments for purpose of income recognition as per the directions, if any, issued by the Competent Authority.
(13) Assets to the extent required to be deposited under local laws or otherwise encumbered in or outside India.
(14) Basis of amortisation of debt securities.
(15) Percentage of business sector wise.
(16) Bases of allocation of investments and income thereon between Policy-holders’ Account and Shareholders’ Account.
(17) Disclosure of policy and principles for provisioning for policy cancellations during free look period, based on assumptions and experience, duly certified by the appointed actuary.
(18) Unclaimed amount including related income – treatment and presentation.
(19) Any other information as may be specified.
C. The following information shall be disclosed for General insurance business, Health insurance business and Re-insurance business by way of notes –
(1) Contingent Liabilities:
i. Partly-paid up investments
ii. Underwriting commitments outstanding
iii. Claims, other than those under policies, not acknowledged as debts
iv. Statutory demands/liabilities in dispute, not provided for
v. Reinsurance obligations to the extent not provided for in accounts
vi. Others (to be specified)
(2) Encumbrances to assets of the company in and outside India.
(3) Commitments made and outstanding for Loans, Investments and Fixed Assets.
(4) Claims, less reinsurance, paid to claimants in/outside India.
(5) Actuarial assumptions for determination of claim liabilities in the case of claims where the claims payment period exceeds four years.
(6) Ageing of claims – distinguishing between claims outstanding for more than six months and other claims.
(7) Premiums, less reinsurance, written from business in/outside India.
(8) Value of contracts in relation to investments, for-
i. Purchases where deliveries are pending;
ii. Sales where payments are overdue
(9) Operating expenses relating to insurance business: basis of allocation and apportionment of expenditure to various classes of business.
(10) Historical costs of those investments valued on fair value basis.
(11) Computation of managerial remuneration.
(12) Basis of amortisation of debt securities.
(13) Fair value of investment property and the basis therefor.
(14) Claims settled and remaining unpaid for a period of more than six months as on the Balance Sheet date.
(15) Provisions made for policy cancellations during free look period in current year and previous year duly certified by the appointed actuary.
(16) Investments made in accordance with any statutory requirement should be disclosed separately together with its amount, nature, security and any special rights in and outside India.
(17) Segregation into performing/non-performing investments for purpose of income recognition as per the directions, if any, issued by the Competent Authority.
(18) Percentage of business sector-wise.
(19) Basis of allocation of Interest, Dividends and Rent between Revenue Account and Profit and Loss Account.
(20) Disclosure of policy and principles for provisioning for policy cancellations during free look period, based on assumptions and experience, duly certified by the appointed actuary.
(21) Any other information as may be specified.
10. General Instructions for Preparation of Ind AS Financial Statements
(1) The corresponding amounts for the immediate preceding financial year for all items shown in the Balance Sheet, Revenue Account, Profit and Loss Account and Receipts and Payments Account shall be given.
(2) The figures in the Ind AS Financial Statements may be rounded off to the nearest Lakhs.
(3) Interest, dividends and rentals receivable in connection with an investment should be stated at gross amount, the amount of income tax deducted at source should be included under “advance taxes paid” and taxes deducted at source.
(4) The company shall make provisions for damages under lawsuits where the management is of the opinion that the award may go against the insurer.
(5) Extent of risk retained and re-insured shall be separately disclosed.
(6) All insurers are required to maintain separate investment accounts for the shareholders and the policy holders and the income/ losses accrued / capital gains/losses on the investments is to be credited /debited to the Revenue Account/ Profit & Loss Account, as the case may be.
(7) Each item of the Ind AS Financial Statements shall be cross-referenced to any related information in the notes to accounts.
(8) Ind AS Financial Statements shall disclose all ‘material’ items, i.e. the items which could, individually or collectively, influence the economic decisions that users make on the basis of the Ind AS Financial Statements.
11. Contents of Management Report:
Management report shall be attached to the Ind AS Financial Statements containing, inter alia, the following duly authenticated by the management:
(1) Confirmation regarding the continued validity of the registration granted by the Authority.
(2) Certification that all the dues payable to the statutory authorities have been duly paid.
(3) Confirmation to the effect that the shareholding pattern and any transfer of shares during the year are in accordance with the statutory or regulatory requirements.
(4) Declaration that the management has not directly or indirectly invested outside India the funds of the holders of policies issued in India.
(5) Confirmation that the required solvency margins have been maintained.
(6) Certification to the effect that the values of all the assets have been reviewed on the date of the Balance Sheet and that in his (insurer’s) belief the assets set forth in the Balance Sheet are shown in the aggregate at amounts not exceeding their realisable or market value.
(7) Certification to the effect that no part of the life insurance fund has been directly or indirectly applied in contravention of the provisions of the Insurance Act, 1938 (4 of 1938) relating to the application and investment of the life insurance funds.
(8) Disclosure with regard to the overall risk exposure and strategy adopted to mitigate the same.
(9) Operations in other countries, if any, with a separate statement giving the management’s estimate of country risk and exposure risk and the hedging strategy adopted.
(10) Ageing of claims indicating the trends in average claim settlement time during the preceding five years.
(11) Certification to the effect as to how the values, as shown in the Balance Sheet, of the investments and stocks and shares have been arrived at, and how the market value thereof has been ascertained for the purpose of comparison with the values so shown.
(12) Review of asset quality and performance of investment in terms of portfolios, i.e., separately in terms of real estate, loans, investments, etc.
(13) A responsibility statement indicating therein that:
i. in the preparation of Ind AS Financial Statements, the applicable Indian Accounting Standards, principles and policies have been followed along with proper explanations relating to material departures, if any;
ii. the management has adopted accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Profit or Loss under Revenue Account and of the Profit or Loss of the company for the year;
iii. the management has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the applicable provisions of the Insurance Act 1938 (4 of 1938)/ Companies Act, 2013 , for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
iv. the management has prepared the Ind AS Financial Statements on a going concern basis;
v. the management has ensured that an internal audit system commensurate with the size and nature of the business exists and is operating effectively.
(14) A schedule of payments, which have been made to individuals, firms, companies and organizations in which Directors of the insurer are interested.
(15) Confirmation of compliance with domestic, statutory, regulatory and other laws in the countries in relation to subsidiaries, associates, joint ventures and other arrangements.
(16) Any other information as may be specified.
12. Preparation of Ind AS Financial Statements
(1) An insurer shall prepare the the Balance Sheet [Form Ind AS – BS] and the Statement of Changes in Equity [Form Ind AS – SOCE], Profit and Loss Account [Form Ind AS – P&L] and Revenue Account [Policy-holders’ Account] [Form Ind AS – RA] in Forms as specified in this Part, or as near thereto as the circumstances permit.
(2) Insurer carrying on Life insurance business shall prepare the Ind AS Financial Statements and the schedules therein for the under mentioned businesses separately: –
i. Linked Business- (a) Life, (b) Pension, (c) Health, (d) Others
ii. Non-Linked Business Participating- (a) Life, (b) Pension, (c) Health, (iv) Others
iii. Non-Linked Business -Non-Participating- (a) Life, (b) Pension, (c) Health, (d) Others
iv. Business within India and Business outside India.
v. Any other segment as may be specified.
(3) Insurer carrying on General insurance business or Health insurance business or Re-insurance business shall prepare the Ind AS Financial Statements and the schedules therein for the under mentioned businesses separately:-
i. Fire insurance business
ii. Marine insurance business
iii. Miscellaneous insurance business, separate Schedules shall be furnished for the following at the minimum:
a. Under Motor: sub-segments 1) Motor Own Damage and 2) Motor TP, (Insurers engaged exclusively in Reinsurance business may prepare the schedule at overall Motor level)
b. Under Health: sub-segments 1) Health, 2) Personal Accident and 3) Travel,
c. Workmen’s Compensation/ Employer’s liability,
d. Public/ Product Liability,
e. Engineering,
f. Aviation,
g. Crop,
h. Any other sub-segment contributing more than 10% of the total gross direct premium of the insurer shall be shown separately.
i. Others
j. Any other segment as may be specified.
(4) Segments to be reported on the basis of line of business, and on the basis of business within and
outside India. While giving the segment details of corresponding previous year’s figures should also be given for all the segments.
(5) An insurer shall prepare separate Receipts and Payments Account in accordance with the Direct Method provided under Ind AS 7 – “Ind AS Cash Flow Statement”.
Amounts in lakhs
| Balance Sheet [Form Ind AS – BS] | |||
| Name of insurance company Registration No…. Date of Registration with IRDAI ….. | |||
| Particulars | Schedule | Current Year | Previous Year |
| Assets | |||
| Cash and cash equivalents | 1 | ||
| Investments | 2 | ||
| Loans | 3 | ||
| Other Financial Assets | 4 | ||
| Investment property | 5 | ||
| Insurance contract assets | 6a | ||
| Reinsurance contract assets | 6b | ||
| Property, Plant and Equipment | 7 | ||
| Goodwill | 8 | ||
| Other Intangible Assets | 9 | ||
| Current tax assets | |||
| Deferred tax assets | |||
| Other assets | 10 | ||
| Assets classified as held for sale | |||
| Total Assets | |||
| Liabilities | |||
| Insurance contract liabilities | 6a | ||
| Reinsurance contract liabilities | 6b | ||
| Investment contract liabilities | 6c | ||
| Borrowings | 11 | ||
| Other Financial liabilities | 12 | ||
| Current tax liabilities | |||
| Deferred tax liabilities | |||
| Other liabilities | 13 | ||
| Provisions | 14 | ||
| Total Liabilities (A) | |||
| Equity | |||
| Equity | |||
| Share Capital | |||
| Assigned Capital | |||
| Other Financial Instruments classified as Equity | |||
| Other Equity | |||
| Total Equity (B) | |||
| Total Liabilities & Equity (C) = (A) + (B) | |||
