IRDAI’s Proposed Regulations on Actuarial, Finance, and Investment Functions in Insurance

With a view to promote ease of doing business and to order to streamline regulations and enhance the efficiency of insurance operations in India, IRDIA seeks public comments on draft IRDAI (Actuarial, Finance and Investment Functions of insurers) Regulations, 2024 which proposes to repeal:
 
1. IRDAI (Actuarial Report and Abstract for Life Insurance Business) Regulations, 2016; 
2. IRDAI (Distributions of Surplus) Regulations, 2002; 
3. IRDAI (Assets, Liabilities and Solvency Margin of Life Insurance Business) Regulations, 2016; 
4. IRDAI (Assets, Liabilities and Solvency Margin of General Insurance Business) Regulations, 2016; 
5. IRDAI (Appointed Actuary) Regulations, 2022; 
6. IRDAI (Investment) Regulations, 2016; 
7. IRDAI (Preparation of Financial Statements and Auditors’ Report of Insurance Companies) Regulations, 2002; 
8. IRDAI (Inspection and Fee for Supply of Copies of Returns) Regulations, 2015; 
9. IRDAI (Loans or Temporary Advances to Full Time Employees of the Insurers) Regulations, 2016.
 
For basics, the Actuaries Act, 2006 through IAI regulates the profession of Actuaries in India. Qualified Actuaries for Life insurance, non-life insurance, health insurance and Reinsurance business are enlisted by IRDAI through its Actuarial Department which is tasked with Approval of Appointment of Appointed Actuary, Product Filing & designing, and reviewing various reports such as Economic Capital Reports, Actuarial Reports, IBNR report and Solvency margin reports, with a view to assess the health of insurers and viability of products for policyholders. 
 
The main objective of the proposed draft regulations is to ensure that sound and responsive management practices are in place for effective discharge of actuarial, finance and investment functions and analysis, covering the areas including but not limited to the valuation of assets and liabilities, regulatory reporting, bonus distribution, asset-liability management, solvency, investment and risk management and further provides extensive framework to govern:
1. Actuarial functions (Schedule–I) – containing provisions pertaining to mandatory appointment of Actuary and its procedure, duties and obligations of actuary, etc  
2. Finance functions (Schedule–II) – containing provisions pertaining to applicability of Accounting Standards, Disclosures Forming Part of Financial Statements, Instructions for Preparation of Financial Statements, etc
3. Investment functions (Schedule-III) – prohibits investment instruments in than in approved securities, Exposure norms, etc
4. Loans and Advances by Insurance Companies (Schedule – IV) – prohibits insurer to grant loans or temporary advances to any officer who is not a whole-time Director, etc
5. Inspection and Supply of Returns (Schedule – V)
 
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