Page 102 - India Insurance Report 2023- BIMTECH

90 India Insurance Report - Series II

another committee under the Chairmanship of Mr Dilip Chakraborty, a senior Actuary and consultant.
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The committee submitted its report on 17 July 2017, which recommended as following:
1. Agreement with Balasubramanian Report that RBC must be implemented in India with some
simplifications in the Solvency II guidelines;

2. A factor-based model instead of an internal model by every insurer;

3. QIS (Quantitative Impact Studies) and market research to determine detailed approaches and
parameters;
4. A broad time frame of three years such that RBC gets implemented by March 2021 to coincide with
the implementation of IFRS 17;

5. IRDAI to constitute a Steering Committee with a Member (Actuary), IRDAI being its Sponsor and Chair

5.5.IRDAI Steering Committee for Implementation of RBC Regime

In accordance with the recommendations of the Chakraborty committee, IRDAI, vide its order
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dated 21 September 2017, created a Steering Committee with Ms Pournima Gupte, then Member
(Actuary) of IRDAI as its Sponsor and Chairperson. This steering committee was created to push and
oversee the implementation of RBC in the Indian Insurance industry.

It is believed that the industry and IRDAI want to implement RBC along with IFRS 17
implementation. Since the IFRS 17 implementation has been deferred for the insurance industry, RBC
implementation is also believed to be delayed. However, it is understood that the current Chairman
himself is spearheading the initiative to implement RBC and has set up a “Mission Mode” team within
IRDAI to implement RBC.

While RBC has not been implemented in the Indian insurance industry, in spite of some serious
efforts made by IRDAI in the last decade, a lot of other groundwork has been done by IRDAI, which
would be a pre-requisite for the implementation of RBC in India. Some of these are

1. Creation of a strong Risk Management department headed by a Chief Risk Officer in each insurance
company supervised by a Board committee on Risk Management;

2. Creating and implementing Corporate Governance guidelines in all insurance companies and taking
a strong view on any breach in corporate governance;

3. Strengthening the institution of Appointed Actuary and insisting on a strong actuarial department
within each insurance company, which will be a pre-requisite under RBC for quantifying original
risk, residual risk and capital requirement for each of the residual risks.

4. Encouraging the industry and actuarial profession to discuss, deliberate and research various elements
of RBC for a better understanding of the subject by the industry players.