Indian insurers are likely to face stricter scrutiny over the assessment of their liability, as part of the insurance regulator’s efforts to improve transparency in the industry. Liability, which includes actual claims settled by an insurance company and provision for foreseeable risks, is a crucial number that decides capital adequacy.
The Insurance Regulatory and Development Authority of India has proposed a set of regulations on actuaries, the business professionals who analyse the financial consequences of risks. While companies keep these experts on payroll for valuation of liability that reflects in the balance sheet, the regulator wants involvement of independent actuaries in the process.