The Insurance Regulatory and Development Authority of India (IRDAI) is pushing ahead with plans to implement a risk-based capital (RBC) framework from April 2027, replacing the current solvency-based model that has been in use for decades, according to a Livemint report on July 24.
Under the current framework, insurers maintain capital based on standard industry solvency factors. The RBC framework will require insurers to hold capital proportional to their specific risk profile, valuing assets and liabilities on a market-consistent basis. This means insurers with riskier portfolios — higher investment volatility, concentrated underwriting, or poor claims experience — will need to hold more capital.
Industry readiness varies widely. Insurers with foreign parents that have experience with Solvency II in Europe or similar frameworks are better positioned. Public sector general insurers, many with legacy systems and data quality issues, face steeper challenges. The concurrent implementation of Ind AS 117 (new insurance accounting standards) adds to the compliance burden. A severe shortage of qualified actuaries in India further complicates the transition.
Source: Livemint (July 24, 2026)