NFRA is examining ICAI’s proposal for a new accounting standard for insurance contracts

The National Financial Reporting Authority (NFRA) has reviewed proposals from the Institute of Chartered Accountants of India (ICAI) for a new Standard (Ind AS) to govern the accounting of insurance contracts. The NFRA will submit its recommendations to the Ministry of Corporate Affairs (MCA), which will then consider and notify Ind AS 117 under the Companies (Indian Accounting Standards) Rules 2015, replacing current Ind AS 104. IFRS 17, issued by the International Accounting Standards Board (IASB) in 2017, is a comprehensive revision of the accounting standards for the insurance industry, specifically tailored to the unique characteristics of insurance and investment contracts for insurance entities. This new standard will enable the Indian insurance sector to provide internationally comparable financial information, promoting investment and increasing insurance penetration in the country. NFRA also conducted an outreach program with members of the life insurance industry and the IRDAI in February 2023 as part of its evaluation of the proposed new standard on insurance contracts.