Irdai has worked on the implementation of the RBC framework to replace the current current margin system with fixed solubility. | Photocredit: Istockphoto
The Insurance Regulatory and Development Authority of India (IRDAI) has ordered insurance companies to undertake a quantitative impact study (QIS) to implement risk -based Capital (RBC) Regulatory framework for the Indian insurance sector.
Irdai has worked on the implementation of the RBC framework to replace the current margin system with fixability in an attempt to coordinate domestic industry to worldwide standards with a risk-sensitive approach.
“Insurance based on risks would enable insurers to keep capital in proportion to the risks they undertake to facilitate the financial stability and protection of the interests of policyholders. It would focus on the specific risks that an insurer faces such as investments, insurance, operational and market risks would focus. line.
“The development and implementation of the RBC framework is one of the most important initiatives that IRDAI is being carried out, among other things, to coordinate the Indian insurance sector with worldwide best practices,” Irdai said in communication with insurers.
Word of caution
Irdai had carried out the first quantitative impact study (QIS 1) to assess the first impact of the RBC framework in 2023.
Based on the insights and suggestions received from insurers, a second quantitative impact study (QIS 2) was deemed necessary to further improve the framework.
The supervisor asked insurers to carry out QIS 2 according to the technical guidance document, with the data used for actuarial appreciation on 31 March 2025, which were sent to the insurers separately.
According to a senior actuary from a listed general insurance company, the direction to perform a second QIs would be further careful when rolling out the new framework. “Although it would be expected this year, we can now expect that it will be introduced some time next year,” he said.
The latest report on the assessment program for Financial Sector (FSAP), a joint program of the International Monetary Fund (IMF) and the World Bank (WB), has recognized transition plans into a risk -based approach in the insurance sector as an indication of ‘India’s dedication to global best practices’.
Published on August 18, 2025
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