The Hindu Business Line : ‘Universal accounting practices needed’

Hyderabad, Nov. 6 Mr C. S. Rao, Chairman, Insurance Regulatory and Development Authority (IRDA) has underlined the need for adoption of universal financial/accounting practices by the insurance industry.

In his inaugural address, at a roundtable on compliance aspects of accounting, auditing and regulatory requirements in the insurance sector here on Tuesday, Mr Rao said interest of foreign players in Indian insurance market was rapidly growing and the trend would call for a common accounting language.

The European Union has already taken a lead in implementing International Financial Reporting Standard (IFRS) 4 Insurance Contracts by the end of 2007-08. “We should facilitate the entry of this language into India,” the insurance regulator said.

Trends

On the trends in the insurance industry, Mr Rao said growth in the life segment was greater than that in the non-life segment. “In the non-life segment, we are finding a shift of emphasis from assets to individuals. The implications of these developments for accounting should be examined,” he added.

Mr Sunil Talati, President, Institute of Chartered Accountants of India (ICAI), said speedy growth in middle income population in India was a key factor for insurance industry.

“The industry is now being driven by income integration, domestic competition, knowledge boom, legal system and growth in domestic markets,” he said.

An insurance panel set by ICAI (in 2003) was looking into accounting and auditing aspects of insurance from time to time, he added. The one-day roundtable was jointly organised by IRDA and ICAI.

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