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INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY

NOTIFICATION

Gandhinagar, the 12th January, 2023

International Financial Services Centres Authority (Preparation and Presentation of Financial Statements of International Financial Service Centre Insurance Offices) Regulations, 2022

No. IFSCA/2022-23/GN/REG033 .— In exercise of the powers conferred by Section 28 read with Sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, and Section 114A of the Insurance Act, 1938, the International Financial Services Centres Authority hereby makes the following regulations namely: –

CHAPTER – I

1. Short title and commencement –

(1) These regulations may be called the International Financial Services Centres Authority (Preparation and Presentation of Financial Statements of International Financial Service Centre Insurance Offices) Regulations, 2022.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Applicability

These regulations shall be applicable to International Financial Service Centre Insurance Offices (IIOs) registered with the Authority under International Financial Services Centres Authority (Registration of Insurance Business) Regulations, 2021.

3. Objective –

These regulations aim to put in place the process of preparation and presentation of financial statements of the International Financial Service Centre Insurance Offices (IIO).

4. Definitions –

(1) In these regulations, unless the context otherwise requires –

(i) ‘Act’ means the International Financial Services Centres Authority Act, 2019 (50 of 2019);

(ii) ‘accounting year’-

a. In relation to an IIO set up in an unincorporated entity form, shall refer the financial year followed by its parent entity;

b. In relation to an IIO set up in an incorporated form, shall refer to a period ending on the 31st March every year;

(iii) ‘Authority’ means the International Financial Services Centres Authority established under sub­section (1) of Section 4 of the Act;

(iv) ‘insurance contract’ means a contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder’.

(v) ‘IRDAI’ means The Insurance Regulatory and Development Authority of India constituted under the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999);

(vi) ‘International Financial Services Centre’ shall have the same meaning as assigned to it under clause (g) of sub-section (1) of section 3 of the Act;

(vii) ‘International Financial Service Centre Insurance Office’ shall have the same meaning as assigned to it under clause (k) of sub-regulation (1) of regulation 3 of the International Financial Services Centres Authority (Registration of Insurance Business) Regulations, 2021;

(viii) ‘Parent Entity’ shall have the same meaning as assigned to it under clause (q) of sub-regulation (1) of regulation 3 of the International Financial Services Centres Authority (Registration of Insurance Business) Regulations, 2021;

(ix) ‘Policyholders’ Fund’ shall mean the sum of estimated liability for Outstanding Claims and includes incurred but not reported (‘IBNR’), incurred but not enough reported (‘IBNER’), unexpired risk reserve (‘URR’), premium deficiency reserve (‘PDR) , catastrophe reserve (‘CR’), and other liabilities net off other assets.

Explanation: (1) Other Liabilities, comprise of (i) premium received in advance (ii) unallocated premium (iii) balance due to other insurance companies (iv) sundry creditors (due to policyholders), etc. and (2) Other Assets comprise of (i) outstanding premium (ii) due from other entities carrying on Insurance business including Re-insurers (iii) balance with terrorism pool (if applicable), etc.

(x) ‘Shareholders’ Funds’ shall mean share capital plus all reserves and surplus (except revaluation reserve and fair value change account) net of accumulated losses and miscellaneous expenditure to the extent not written off as at the Balance Sheet date.

Explanation: For the purposes of reckoning the ‘shareholders’ fund’, the IIOs in an unincorporated form shall use ‘assigned capital’ as mentioned in sub regulation (2) of regulation 17 of International Financial Services Centres Authority (Registration of Insurance Business) Regulations, 2021, instead of ‘share capital’.

(2) Words and expressions used and not defined in these regulations but defined in the Act or Acts mentioned in the First Schedule to the Act or any rules, regulations made thereunder, shall have the same meaning respectively assigned to them in those Acts, rules or regulations or any statutory modification or re-enactment thereto.

CHAPTER – II

General instructions for preparation & presentation of Financial Statements

5. Applicable ‘Accounting Standard’ or “AS”

(1) An IIO set up in an unincorporated form, shall prepare its financial statements in accordance with the accounting standards applicable to its Parent Entity.

(2) An IIO set up in an incorporated form, shall prepare its financial statements in accordance with the accounting standards issued by the Institute of Chartered Accountants of India (ICAI), except that:

(i) Cash Flow Statements shall be prepared only under the Direct Method as provided under Accounting Standard 3 (AS 3);

(ii) Segment Reporting shall be prepared in accordance with Accounting Standard 17 (AS 17), irrespective of the requirements regarding listing and turnover mentioned therein;

(iii) Accounting Standard 13 (AS 13) on Accounting for Investments shall not be applicable;

Provided that the Authority may specify the transition to IFRS or any other accounting standard, as and when it deems fit.

6. Preparation of financial statements by IIOs set up in an incorporated form:

(1) IIOs set up in an incorporated form and engaged in life insurance business, shall adhere to the accounting principles, standards and disclosures or other requirements, as specified under Schedule- A.

(2) IIOs set up in an incorporated form and engaged in general insurance business or reinsurance business, shall adhere to the accounting principles, standards and disclosures or other requirements, as specified under Schedule- B.

7. Presentation of financial statements

(1) All IIOs shall present their financial statements in such form and manner as specified by the Authority.

(2) The financial statements prepared by IIOs shall also include comparative information in respect of the preceding accounting year.

8. An IIO shall clearly disclose the Accounting Standards which have been followed in the preparation and presentation of the financial statements.

9. The financial statements prepared and presented by IIOs shall inter-alia include a detailed statement of the accounting policies applied for each aspect of the financial statement.

10. An IIO shall disclose the change in accounting standard or any of the accounting policies adopted and its head-wise financial impact on the financial statements.

11. Any financial reporting by an IIO to the Authority shall be in USD, unless otherwise specified by the Authority.

12. An IIO set up in an incorporated form, shall submit its Annual Report to the Authority within ninety (90) days from the end of financial year, inter-alia containing the following:

(i) Board of Director’s Report;

(ii) Management Discussion and Analysis (MD&A) Report;

(iii) Risk Management Report;

(iv) Corporate Governance Report;

(v) Audited financial statements with corresponding Notes to Accounts;

(vi) Certified External Auditor Report; and

(vii) Certified Actuarial Report.

13. An IIO shall make disclosures of all related party transactions in its audited financial statements.

14. Any contract not covered under ‘insurance contract’, as defined in regulation 4(1)(iv) above, shall be reported and disclosed separately.

15. Separation of Funds

(1) All IIOs shall keep separate accounts of shareholders’ funds and policyholders’ funds in a manner as may be specified by the Authority.

(2) All IIOs shall ensure that the investments allocated to the policyholders shall not be less than the value of the policyholders’ fund.

CHAPTER – III

Maintenance of Books of Accounts, Records and Documents

16. An IIO shall maintain and preserve the following documents as may be specified by the Authority in electronic retrieval form-

(1) balance sheet as at the end of each accounting year;

(2) profit and loss account for each accounting year, which shall be maintained on accrual basis;

(3) revenue account;

(4) statement of cash/fund flow (direct method); and

(5) such other books of accounts, records and documents related to its business activities, as may be specified by the Authority from time to time.

17. All books of accounts, documents, statements, contract notes etc., referred to in these regulations shall be retained by an IIO as specified in International Financial Services Centres Authority (Maintenance of Insurance Records and Submission of Requisite Information for Investigation and Inspection) Regulations, 2022.

CHAPTER – IV

Miscellaneous

18. Power to specify procedure, etc.:

For the purpose of implementation and facilitation of these regulations and matters incidental thereto, the Authority may specify norms, procedures, processes and manner for compliance by IIOs.

19. Power to remove difficulties and relax strict enforcement of the regulations:

(1) In order to remove any difficulty in the application or interpretations of the provisions of these regulations, the Authority may issue clarifications through guidance notes or circulars.

(2) On an application, received along with the specified non-refundable processing fees, the Authority, may for the reasons to be recorded in writing, relax the strict enforcement of any of the provisions of these regulations.

20. Inspection, Investigation, Information and Disclosure:

(1) The Authority may inspect or investigate the affairs of the IIO including calling for any information from the IIO or its Parent Entity, so far as it relates to its activities as an IIO.

(2) The IIO shall make disclosures, in such form and manner as may be specified by the Authority.

21. Repeals and saving:

(1) On and from the commencement of these regulations, IRDA (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 and guidelines/circulars issued thereunder, shall cease to apply in International Financial Services Centres.

(2) On and from the commencement of these regulations, Chapter – 4 of International Financial Services Centres Authority (Operations of International Financial Services Centres Insurance Offices) Guidelines, 2021, shall stand omitted.

(3) Notwithstanding anything in sub-regulation (1), any action taken or purported to have been taken under the regulations, guidelines, circulars mentioned in sub-regulation (1) before the commencement of these regulations shall be deemed to have been taken under the corresponding provisions of these regulations;

(4) An IIO operating in the IFSC prior to the commencement of these regulations, shall comply with additional requirements stipulated in these regulations, within a period of six (6) months from the date of commencement of these regulations or within such extended time as may be specified by the Authority.

SCHEDULE- A
[Refer Regulation 6(1)]
PART- I
Accounting Principles for Preparation and Presentation of Financial Statements

 1. IIOs shall adhere to the following general accounting principles while preparing financial statements:

(1) Premium: Premium shall be recognised as income when due. For linked business, the due date for payment may be taken as the date when the associated units are created.

(2) Acquisition costs: Acquisition costs, if any, directly attributable to the policy shall be expensed over the contract period or period of risk on the policy. The unexpired portion of the policy shall be deferred and recognised as Deferred Acquisition costs and expensed in subsequent periods.

Explanation: Acquisition costs are the costs that vary with and are primarily related to the acquisition of new and renewal insurance contracts. The most essential test is the obligatory relationship between costs and the execution of insurance contracts (i.e. commencement of risk)

(3) Claims Cost: The ultimate cost of claims shall comprise of the policy benefit amount and specific claims settlement costs, wherever applicable.

(4) Actuarial Valuation – Liability for Life Policies:

(i) The estimation of liability against life policies shall be determined by the appointed actuary of the IIO pursuant to the annual assessment of the life insurance business. Actuarial assumptions shall be disclosed by way of notes to the accounts.

(ii) The liability shall be so calculated that together with future premium payments and investment income, the IIO can meet all future claims (including bonus entitlements to policyholders) and expenses.

(iii) Additionally, the IIO shall maintain adequate assets to discharge all its liabilities.

2. Notwithstanding anything contained in the applicable Accounting Standards as specified in regulation 5 of these regulations, IIOs shall adhere to the following procedure to determine value of its investments:

(1) Investment in Real Estate:

(i) The value of investment in real estate shall be determined at historical cost, subject to revaluation at least once in every three years. The change in the carrying amount of the investment in real estate shall be taken to Revaluation Reserve. The basis for revaluation shall be disclosed in the notes to accounts.

(ii) The IIO shall, before finalisation of its balance sheet, assess whether any impairment of the investment in real estate has occurred. An impairment loss shall be recognised as an expense in the Revenue Account or Profit and Loss Account immediately, unless the asset is carried at re-valued amount. Any impairment loss of a re-valued asset shall be treated as a revaluation decrease of that asset.

(iii) Gains or losses arising due to changes in the carrying amount of real estate shall be taken to equity under ‘Revaluation Reserve. The ‘Profit or Loss on sale of investments’, as the case may be, shall, after adjusting include the accumulated changes in the carrying amount (previously recognised in equity under the heading ‘Revaluation Reserve’) in respect of that particular property and being recycled to the relevant Revenue Account or Profit and Loss Account on sale of that property.

(iv) The bases for revaluation shall be disclosed in the notes to accounts. The Authority may issue directions specifying the amount to be released from the Revaluation Reserve for declaring bonus to the policyholders. For the removal of doubt, it is clarified that except for the amount that is released to policyholders as per the Authority’s direction, no other amount shall be distributed to shareholders out of Revaluation Reserve.

(2) Debt Securities: Debt securities, including government securities and redeemable preference shares, shall be considered as “held to maturity” securities and shall be measured at historical cost subject to amortisation. In case of any downgrade in the rating of the debt securities, which results in a decrease in the accounted value, the possible impact of the same on the balance sheet shall be disclosed in the ‘Notes to Account’.

(3) Listed Equity Securities and Derivative Instruments that are traded in active market:

(i) Listed equity securities and derivative instruments that are traded in active markets shall be measured at fair value on the balance sheet date.

Explanation: For the purpose of calculation of fair value, the lowest of the last quoted closing price in the stock exchanges where the securities are listed shall be taken.

(ii) The IIO shall assess on each balance sheet date as to whether any impairment of listed equity security (ies)/ derivative(s) instruments has occurred.

(iii) An active market shall mean a market, where the securities traded are homogenous, availability of willing buyers and willing sellers is normal and the prices are publicly available.

(iv) Unrealised gains or losses arising due to changes in the fair value of listed equity shares and derivative instruments shall be taken to equity under the head “Fair Value Change Account”. The ‘Profit or Loss on sale of investments’, as the case may be, shall include accumulated changes in the fair value previously recognised in equity under the heading “Fair Value Change Account’ in respect of a particular security and being recycled to the relevant Revenue Account or Profit and Loss Account on actual sale of that listed security.

(v) The Authority may issue directions specifying the amount to be released from the Fair Value Change Account for declaring bonus to the policyholders.

Explanation: it is clarified that except for the amount that is released to policyholders as specified by the Authority, no other amount shall be distributed to shareholders out of Fair Value Change Account. Also, any debit balance in Fair Value Change Account shall be reduced from profit/ free reserves while declaring dividends

(vi) The IIO shall assess, on each balance sheet date, whether any impairment has occurred. An impairment loss shall be recognised as an expense in Revenue Account or Profit and Loss Account to the extent of the difference between the re-measured fair value of the security/investment and its acquisition cost as reduced by any previous impairment loss recognised as expense in Revenue Account or Profit and Loss Account. Any reversal of impairment loss, earlier recognised in Revenue/Profit and Loss Account shall be recognised in Revenue/Profit and Loss Account.

(4) Unlisted or other actively traded Equity Securities and Derivative Instruments: Unlisted equity securities and derivative instruments and listed equity securities and derivative instruments that are not regularly traded in active markets shall be measured at historical cost. Provision shall be made for diminution in value of such investments. The provision so made shall be reversed in subsequent periods if estimates based on external evidence show an increase in the value of the investment over its carrying amount. The increased carrying amount of the investment due to the reversal of the provision shall not exceed the historical cost.

(5) Loans: Loans shall be measured at historical cost subject to impairment provisions. The IIO shall assess the quality of its loan assets and shall provide for impairment.

(6) Loans Secured by Insurance Policies Issued by the IIO: Valuation of a loan secured by an insurance policy issued by the IIO must be as the amount of the loan but not exceeding the amount payable on a surrender or early termination of the policy as at the date the policy is being valued.

(7) Linked Business: A separate set of financial statements, for each segregated fund of the linked businesses, shall be annexed.

Explanation: The fund earmarked in respect of Unit Linked business would be referred to as segregated fund.

(8) Funds for Future Appropriation: The funds for future appropriation shall be presented separately.

Explanation: The funds for future appropriation represent all funds, the allocation of which, either to the policyholders or to the shareholders, has not been determined by the end of the financial year.

(9) Other Assets:

(i) Valuation of deposits and current account balances with banks/ other financial institutions must be at their carrying value. The admissible value of these assets is their carrying value. The admissible value of any cash holding is carrying value.

(ii) For investments, that are not specifically covered above, if the investment is due, or will become due, within twelve (12) months from the date at which the investment is being valued/measured, valuation should be based on the amount which can reasonably be expected to be recovered in respect of the investment, taking due account of any security held in respect thereof.

PART -II

Disclosures forming part of Financial Statements

1. The following shall be disclosed by way of notes to the Balance Sheet:

(1) Contingent Liabilities:

(i) Partly-paid up investments;

(ii) Underwriting commitments outstanding;

(iii) Claims, other than those under policies, not acknowledged as debts;

(iv) Guarantees given by or on behalf of the IIO;

(v) Statutory demands/liabilities in dispute, not provided for;

(vi) Reinsurance obligations ‘to the extent not provided for in accounts’; and

(vii) Others, as may be specified

(2) Actuarial assumptions ‘for valuation of liabilities for life policies in force’.

(3) Encumbrances created over the assets of the IIO.

(4) Commitments made and outstanding for Loans, Investments and Fixed Assets.

(5) Basis of amortisation of debt securities.

(6) Claims settled and remaining outstanding for a period of more than six months on the balance sheet date.

(7) Value of contracts in relation to investments, for:

(i) Purchases where deliveries are pending;

(ii) Sales where payments are overdue.

(8) Historical costs of those investments valued on fair value basis.

(9) Basis of revaluation of assets acquired out of investment.

(10) Impact of Deferred Acquisition Cost on financial statements.

2. The following information shall also be disclosed:

(1) Investments made in accordance with any statutory requirement shall be disclosed separately together with its amount, nature, security and any special rights;

(2) Segregation into performing/ non-performing investments for purpose of income recognition as per the directions, if any, issued by the Authority;

(3) Percentage of business sector-wise and geography-wise;

(4) A summary of financial statements for the last five years, in the manner as may be specified by the Authority;

(5) Bases of allocation of investments and income thereon between Policyholders’ Account and Shareholders’ Account;

(6) Accounting Ratios as may be specified by the Authority.

3. The notes to accounts shall provide, where required,

(1) narrative descriptions or disaggregation’s of items recognized in the Financial Statements;

(2) information about items that do not qualify for recognition in Financial Statements.

SCHEDULE- B

[Refer Regulation 6 (2)]

PART- I

Accounting Principles for Preparation & Presentation of Financial Statements

1. Notwithstanding anything contained in the applicable Accounting Standards as specified in Reg. 5, IIOs shall adhere to the general accounting principles specified in this Part while preparing Financial Statements

2. Segmental Reporting

IIO engaged in general insurance, health insurance or re-insurance business shall prepare a detailed breakup of the revenue accounts on segmental basis in the manner as may be specified by the Authority.

Provided that, the segmental reporting as given above shall be made by way of disclosure in the notes to the accounts for IIOs set up in a branch form.

3. Premium

(1) Premium in respect of insurance contracts shall be recognized as income over the contract period or the period of risk, whichever is relevant.

(2) A reserve for unearned premium shall be created as the amount representing that part of the premium written which is attributable to, and to be allocated to the succeeding accounting periods.

(3) Unearned premium shall be shown separately under the head ‘Current Liabilities’ and appropriate disclosures regarding management’s basis of assessment shall be made in the financial statements.

(4) Unearned Premium Reserve (UPR) shall be computed in such manner as may be specified by the Authority.

(5) Premium Received in Advance, which represents premium received prior to the commencement of the risk, shall be shown separately under the head ‘Current Liabilities’ in the financial statements.

(6) Premium shall be shown net of any tax (as applicable) collected from the policyholders.

4. Premium Deficiency: Premium deficiency shall be recognised if the sum of expected claim costs, related expenses and maintenance costs exceeds related unearned premiums.

5. Acquisition Costs: Acquisition costs, if any, directly attributable to the policy shall be expensed over

the contract period or period of risk on the policy. The portion pertaining to the unexpired portion of the policy shall be deferred and recognised as Deferred Acquisition costs and expensed in subsequent periods.

6. Claims

(1) The components of the ultimate cost of claims to an IIO comprise the claims under policies and claims settlement costs. Claims under policies comprise the claims made for losses incurred, and those estimated or anticipated under the policies following a loss occurrence.

(2) A liability for outstanding claims shall be brought to account in respect of both direct business and

inward reinsurance business. The liability shall include: –

(i) Future payments in relation to unpaid reported claims;

(ii) Claims Incurred But Not Reported (IBNR) including inadequate reserves (sometimes referred to as Claims Incurred But Not Enough Reported (IBNER)) which will result in future cash/asset outgo for settling liabilities against those claims.

Explanation: Change in estimated liability represents the difference between the estimated liability for outstanding claims at the beginning and at the end of the accounting period.

(3) The accounting estimate shall also include claims cost adjusted for estimated salvage value if there is

sufficient degree of certainty of its realisation.

7. Actuarial Valuation of claim liability

(1) Estimate of claims made in respect of contracts shall be recognised on an actuarial basis, subject to provisions of the relevant Accounting Standards and certificate from an appointed actuary as to the fairness of liability assessment shall be obtained.

(2) Actuarial assumptions shall be suitably disclosed by way of notes to the account.

8. Notwithstanding anything contained in the applicable Accounting Standards as specified in Reg. 5, IIOs shall adhere to the following procedure to determine value of investments:

(1) Investment in Real Estate:

(i) Investment in real estate shall be measured at historical cost less accumulated depreciation and impairment loss, residual value being considered zero and no revaluation being permissible.

(ii) The IIOs shall assess at each balance sheet date whether any impairment of the investment in real estate has occurred.

(iii) An impairment loss shall be recognised as an expense in the revenue/profit and loss account immediately.

(iv) Fair Value as at the balance sheet date and the basis of determination shall be disclosed in the financial statements as additional information.

(2) Debt Securities: Debt securities, including government securities and redeemable preference shares,

shall be considered as “held to maturity” securities and shall be measured at historical cost subject to amortisation. In case of any downgrade in the rating of the debt securities, which results in a decrease in the accounted value, the possible impact of the same on the balance sheet shall be disclosed in the ‘Notes to Account’.

(3) Listed Equity Securities and Derivative Instruments that are traded in active market:

(i) Listed equity securities and derivative instruments that are traded in active markets shall be measured at fair value on the balance sheet date.

Explanation: For the purpose of calculation of fair value, the lowest of the last quoted closing price in the stock exchanges where the securities are listed shall be taken.

(ii) The IIO shall assess on each balance sheet date as to whether any impairment of listed equity security (ies)/ derivative(s) instruments has occurred.

(iii) An active market shall mean a market, where the securities traded are homogenous, availability of willing buyers and willing sellers is normal and the prices are publicly available.

(iv) Unrealised gains/ losses arising due to changes in the fair value of listed equity shares and derivative instruments shall be taken to equity under the head ‘Fair Value Change Account”. The ‘Profit or Loss on sale of investments’, as the case may be, shall include accumulated changes in the fair value previously recognised in equity under the heading “Fair Value Change Account’ in respect of a particular security and being recycled to the relevant Revenue Account or Profit and Loss Account on actual sale of that listed security.

(v) The Authority may issue directions specifying the amount to be released from the Fair Value Change Account for declaring bonus to the policyholders.

Explanation: it is clarified that except for the amount that is released to policyholders as specified by the Authority, no other amount shall be distributed to shareholders out of Fair Value Change Account. Also, any debit balance in Fair Value Change Account shall be reduced from profit/ free reserves while declaring dividends

(vi) The IIO shall assess, on each balance sheet date, whether any impairment has occurred. An impairment loss shall be recognised as an expense in Revenue/Profit and Loss Account to the extent of the difference between the re-measured fair value of the security/investment and its acquisition cost as reduced by any previous impairment loss recognised as expense in Revenue/Profit and Loss Account. Any reversal of impairment loss, earlier recognised in Revenue/Profit and Loss Account shall be recognised in Revenue/Profit and Loss Account.

(4) Unlisted and other than actively traded Equity Securities and Derivative Instruments: Unlisted equity securities and derivative instruments and listed equity securities and derivative instruments that are not regularly traded in active markets shall be measured at historical cost. Provision shall be made for diminution in value of such investments. The provision so made shall be reversed in subsequent periods if estimates based on external evidence show an increase in the value of the investment over its carrying amount. The increased carrying amount of the investment due to the reversal of the provision shall not exceed the historical cost.

(5) Loans: Loans shall be measured at historical cost subject to impairment provisions. The IIO shall assess the quality of its loan assets and shall provide for impairment.

(6) Catastrophe Reserve: shall be created in accordance with norms, if any, specified by the authority.

PART- II

Disclosures forming part of Financial Statements

1. Additional disclosures forming part of Balance Sheet

(1) Contingent Liabilities and Commitments (to the extent not provided for)

(i) Contingent Liabilities shall be classified as:

a. Claims, other than those under policies, not acknowledged as debt

b. Reinsurance obligations;

c. Statutory demands/liabilities in dispute, not provided for;

d. Other money for which the IIO is contingently liable.

(ii) Commitments shall be classified as:

a. Estimated amount of contracts remaining to be executed on capital account and not provided for;

b. Uncalled liability on shares and other investments partly paid;

c. Other commitments (specify nature).

(2) Encumbrances over the assets of the IIO in and outside India.

(3) Contracted amount in relation to investments for:

(i) Purchases where deliveries are pending;

(ii) Sales where payments are overdue.

(4) Extent of risk retained and reinsured in respect of insurance contracts.

(5) Claims settled and remaining outstanding for a period of more than six months on the balance sheet date.

(6) When the IIO applies an accounting policy retrospectively or makes a restatement of items in the financial statements or when it reclassifies items in its financial statements, the IIO shall attach to the Balance Sheet a restated “Balance Sheet” as at the beginning of the earliest comparative period with detailed schedules of the impacted areas.

(7) The minimum assigned capital for an IIO in terms of the Act, shall be presented as a separate component of equity under Statement of Changes in Equity. Any contribution in excess of the minimum assigned capital shall be classified in accordance with relevant Accounting Standards.

(8) Actuarial assumptions in valuation of claims shall be presented in detail as part of the notes to the financial statements.

(9) Impact of Deferred Acquisition Cost on financial statements.

2. Additional disclosures forming part of Notes to Statement of Profit & Loss

(1) Computation of managerial remuneration;

(2) Extent of premium income recognised for general insurance business, based on varying risk pattern, category wise, with basis and justification therefor, including whether reliance has been placed on external evidence;

(3) Items of expense and income in excess of one percent of the total net premium shall be shown separately;

(4) Details of various penal actions taken by Regulatory Authorities on the IIO or its parent entity;

(5) Accounting Ratios as may be specified by the Authority.

3. The notes to accounts shall also provide, where required,

(1) narrative descriptions or disaggregation’s of items recognized in the Financial Statements;

(2) information about items that do not qualify for recognition in Financial Statements.

INJETI SRINIVAS, Chairperson
[ADVT.III/4/Exty./557/2022-23]

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