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India IFRS17 insurance audit

Independent validation for Ind AS implementation in Indian insurance companies

Anubhav Chattoraj, Founder & Director · 22 July 2026 · 4 min read

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 implementation, including system readiness, governance, and controls, among other such areas.

As per the circular, the scope includes assessment of the following areas:

a. Strategy: The Independent Validator shall assess whether the insurer has established an appropriate strategy for implementation of Ind AS, including:

i. Board-approved implementation strategy and roadmap, including timelines and milestones;

ii. governance structure and accountability;

iii. adequacy of implementation resources, including actuarial, finance, risk and information technology functions;

iv. data management and implementation strategy;

v. transition approach adopted under the applicable provisions of Ind AS 101 and Ind AS 117;

vi. information technology and systems readiness for implementation of Ind AS; and

vii.Board oversight and periodic monitoring of implementation progress.

b. Governance: The Independent Validator shall assess whether appropriate governance arrangements have been established […]

c. Risks and Controls: The Independent Validator shall assess whether adequate controls have been established and are operating effectively […]

The circular further states that:

The Independent Validation is limited to an assessment of the processes adopted by the insurer for implementation of Ind AS and does not constitute an audit of the Financial Statements or an actuarial opinion on policy liabilities or an assurance on the accuracy of the Financial Statements.

Who can be a validator?

As per the circular, the Independent Validator shall “be a professional Chartered Accountancy firm that is neither appointed as the Statutory Auditor of the insurer nor is Ind AS implementation service provider/knowledge partner engaged by the insurer, if any, and satisfies the applicable independence requirements”.

When is validation needed?

The Independent Validation exercise is to be undertaken during the first year of Ind AS implementation, which will be:

  • 1 April 2027 - 31 March 2028 for insurance companies who have been granted forbearance

  • 1 April 2026 - 31 March 2027 for other insurance companies

The Independent Validator is required to be involved from the first quarter onwards.

There is a requirement for quarterly validation report submission to the Board before the completion of the audit/limited review of the Ind AS Financial Statements. The report is also to to be submitted to IRDAI on an annual basis before the publication of the audited Ind AS financial statements.

Actuary’s role in independent validation

The circular specifically requires the Independent Validator to work with an independent actuary:

[The Independent Validator shall] be guided by the principles contained in applicable Standards on Auditing issued by the Institute of Chartered Accountants of India, including SA 620, “Using the Work of an Auditor’s Expert”. The Independent Validator shall utilise actuarial expertise, advice and other actuarial inputs from an actuary independent of the insurer in respect of actuarial matters relevant to the Independent Validation

In our earlier detailed FAQ on the role of actuaries in insurance audits, we had noted that it is at present not mandatory for auditors to engage an “Auditing Actuary” for reviewing Ind AS financial statements. We had, however, also noted that “a direction from IRDAI requiring the involvement of Auditing Actuaries in audits of all insurance companies would be unsurprising” (footnote 9 of the linked post).

IRDAI now requires Independent Validators to mandatorily engage an actuary as auditor’s expert. In our view, this makes it more likely that IRDAI will eventually require actuarial involvement in insurance company audits.