The Insurance Regulatory and Development Authority of India (IRDAI) on June 27, 2023, notified regarding the Risk Based Supervisory Framework to promote a ‘Principle based Regulatory regime’, foster ease of doing business, and encourage proactive risk identification and management.
The IRDAI has been working towards developing and implementing a ‘Risk Based Supervision’ (RBS) framework for the insurance sector in India. For this purpose, IRDAI has collaborated with M/s Toronto Centre (TC), which is a not-for-profit organization, working with a mission of promoting strong supervision in order to enhance financial stability, crisis preparedness, and consumer protection.
RBS is a change in how supervision is done that focuses on proportionality, materiality, and a comprehensive review of regulated entity actions from a risk viewpoint. Over the past few months, IRDAI has been interacting with numerous stakeholders to ensure the sound development and seamless implementation of RBS. Following recent discussions with TC, the first round of RBS pilots is expected to start in July 2023.
