The TailVaR Blog
Insights and commentary on insurance, IFRS 17, ESOPs, employee benefits, and our other areas of expertise.
Ind AS adoption will lead to tax uncertainty for Indian general, health, and reinsurance companies
Summary Indian insurance companies are required to adopt Ind AS (the Indian equivalent of the IFRS standards) as the basis for financial reporting effective either 1 April 2026 or 1 April 2027. The Income Tax Act requires general, health, and reinsurance companies to be taxed on the profit disclosed in the profit and loss account (P&L) prepared as per the Insurance Act and IRDAI regulations. With regulations now shifting the basis of preparation of financial statements to Ind AS, this means that such companies are likely to be taxed based on their Ind AS financial statements. This leads to…
India: Why are EPF contributions calculated on the full basic salary?
Background On 29 June 2026, India's Central Government introduced the Employees' Provident Fund (EPF) Scheme, 2026, replacing the earlier EPF Scheme, 1952. Both the 1952 and the 2026 schemes are defined-contribution schemes where the accumulated contributions can be withdrawn as a lump sum on superannuation. Both the 1952 and the 2026 schemes have a ₹15,000 per-month cap (the wage ceiling) on salaries with an option to ignore it and calculate contributions on the full salary instead. Large employers generally ignore the ceiling and calculate contributions on the full basic salary, with the…
Independent validation for Ind AS implementation in Indian insurance companies
Background Indian insurance companies are required to adopt Ind AS (the Indian equivalent of the IFRS standards) as the basis for financial reporting effect either 1 April 2026 or 1 April 2027. The relevant regulation requires insurance companies to obtain "independent validation of process adopted in implementation of Ind AS". In a follow-up circular dated 14 July 2026, the Indian insurance regulator IRDAI has detailed the scope of independent validation. What does independent validation cover? As required by the regulation, the independent validation covers largely the process around Ind AS…
Global regulation of AI risk in financial services: Convergent guidance from EIOPA & RBI
Background With AI making inroads into every sector of the economy, regulators across the world find themselves considering how best to mitigate the risks emerging from AI adoption. At present, their answers show a degree of convergence. In this article, we demonstrate these similarities by comparing how two financial-sector regulators from different parts of the world approach this issue: In August 2025, EIOPA, the European Union's insurance regulator, published an Opinion on Artificial Intelligence governance and risk management. This builds on the framework established by the EU's landmark…
Actuaries in insurance audits in India: Detailed FAQs
Background Use the "contents" / "in this article" panel for easy navigation. As mentioned in our earlier article, actuarial liabilities have now been brought within the scope of statutory audits in India for Ind AS financial statements. The valuation of actuarial liabilities and their accounting under standards such as IFRS 4/17 (or the Indian equivalent Ind AS 117) requires complex technical calculations and expert judgement. These areas lie outside most auditors' areas of expertise. Therefore, in many markets across the world, auditors engage actuaries to help them understand and form an…
IFRS adoption brings India's actuarial liabilities under audit scope
Background and adoption date Indian insurance companies so far have been reporting financial results under Indian GAAP. Following a preparatory period, the Indian insurance regulator, IRDAI, has asked insurance companies to transition to Ind AS, the local equivalent of IFRS. The adoption date is effectively 1 April 2027, with early adoption permitted on 1 April 2026 (the Indian financial year runs from April to March).[^1] In practice, only a handful of insurance companies have adopted IFRS effective April 2026; most insurance companies are expected to adopt it effective April 2027. [^1]:…
Why insurance companies need internal capital models
Globally, capital modelling is one of the major verticals of actuarial work along with verticals like pricing and reserving. To my knowledge, however, the capital modelling vertical does not exist in Asia. This article is therefore intended as a brief primer about what capital models are and why insurance companies need them, for companies and actuaries who may not be very familiar with the concept. I use "capital model", "internal model", and "internal capital model" interchangeably in this article. Why does an insurance company need a capital model? Internal capital models are not…