Eleven insurance companies have begun implementing Indian Accounting Standards (Ind AS) in the financial year 2026-27, as India moves to a new accounting framework for the insurance sector and seeks to align domestic practices with global standards such as IFRS (International Financial Reporting Standard) 17.
The phased transition, being overseen by the Insurance Regulatory and Development Authority of India (IRDAI), is intended to change how insurers measure and report their financial performance. However, it does not, by itself, alter the terms of an existing insurance policy.
The transition follows the notification of Ind AS 117, which deals with insurance contracts, and Ind AS 109, which covers financial instruments. IRDAI’s current implementation framework requires insurers to shift their financial reporting to Ind AS, with some insurers receiving regulatory forbearance and being monitored for implementation in FY2027-28.
The Changes Ind AS 117 Ushers For Insurers
Ind AS 117 introduces a new approach to accounting for insurance contracts, including how insurance liabilities and the profit associated with contracts are measured and recognised. Subsequently, Ind AS 109 governs the accounting treatment of financial assets and other financial instruments held by insurers.
The result can be significant changes in an insurer’s reported profit, reserves, liabilities and balance-sheet figures. Industry reporting on the transition has also highlighted potential changes in actuarial calculations and the timing of profit recognition.
For insurers, therefore, the shift is substantial. For customers, however, the immediate implications are much narrower.
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Impact on Policyholders
IRDAI’s policyholder framework separately requires insurers to provide information on benefits, exclusions, claims procedures and grievance mechanisms. This indicates that the accounting transition does not rewrite the commercial terms of an insurance contract.
Premiums for policies are determined under the applicable product and regulatory framework, which means adopting a different accounting standard does not automatically give an insurer the power to change the premium stated in an existing policy.
Similarly, the accounting change does not by itself reduce the sum insured, remove an insured benefit, or introduce a new exclusion. The transition also does not mean that a valid claim under an existing policy can simply be rejected because the insurer has moved to Ind AS. A policyholder’s rights continue to be governed by the policy contract and applicable insurance regulations. Ind AS changes the insurer’s books, not the basic promise contained in the policy.
Indirect Implications
IRDAI has said the transition is intended to provide stakeholders with more meaningful information about insurers’ financial performance and position. That could mean that investors, regulators and analysts see changes in reported profits, reserves and liabilities that reflect accounting methodology rather than an equivalent change in the insurer’s underlying cash flows or policy obligations.
As of FY2026-27, SBI General Insurance, Niva Bupa Health Insurance, and Star Health and Allied Insurance have already submitted first-quarter financial numbers under Ind AS. Other insurers in the first group include Acko Life, Tata AIA Life, Acko General, Kiwi General, ECGC, Aditya Birla Health and Galaxy Health, along with a foreign reinsurance branch. IRDAI is monitoring insurers granted forbearance for the next phase.
For the average policyholder, therefore, existing policies remain largely untouched. Ind AS is primarily a change in how your insurer reports its finances and not one in what your policy promises you.
However, if your policy is a good few years old, a recalibration does no harm. MyRupia assists policyholders in understanding their insurance policies against current financial realities. You can also book a free consultation with our independent insurance experts and get IRDAI escalation support and insights for long-term financial health.
Disclaimer: This MyRupia article provides information based on publicly available government, regulatory and industry sources. It does not constitute investment, financial, tax, insurance or legal advice. Information, examples, market data and expert views may change over time and do not represent a recommendation to buy, sell, invest in or surrender any financial product. Readers should consider their individual circumstances and consult a qualified financial professional before making financial decisions.