{"id":3633,"date":"2025-09-02T05:22:02","date_gmt":"2025-09-02T05:22:02","guid":{"rendered":"https:\/\/www.luzenta.com\/blog\/?p=3633"},"modified":"2025-09-02T05:22:02","modified_gmt":"2025-09-02T05:22:02","slug":"understanding-ind-as-117-major-changes-in-insurance-reporting-standards","status":"publish","type":"post","link":"https:\/\/www.luzenta.com\/blog\/understanding-ind-as-117-major-changes-in-insurance-reporting-standards\/","title":{"rendered":"Understanding Ind AS 117: Major Changes in Insurance Reporting Standards"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Indian Accounting Standard (Ind AS) 117 governs the recognition, measurement, presentation, and disclosure of insurance contracts. Replacing Ind AS 104, this new standard aligns with IFRS 17, aiming to bring transparency and comparability in financial statements of insurers and reinsurers. It became mandatory in India from April 1, 2023, for entities preparing financial statements under Ind AS.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The main objective of Ind AS 117 is to ensure that an entity provides relevant information that faithfully represents the contracts it issues and helps users of financial statements assess the effect insurance contracts have on the financial position, performance, and cash flows of the company.<\/span><\/p>\n<p><b>Scope of Ind AS 117<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 applies to:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance contracts, including reinsurance contracts issued<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reinsurance contracts held<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Investment contracts with discretionary participation features issued by an insurer<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The standard does not apply to:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Product warranties issued directly by a manufacturer, dealer, or retailer<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employers\u2019 assets and liabilities under employee benefit plans<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Financial guarantee contracts (unless the issuer has previously asserted explicitly that it regards such contracts as insurance contracts)<\/span><\/li>\n<\/ul>\n<p><b>Definition of Insurance Contract<\/b><\/p>\n<p><span style=\"font-weight: 400;\">An insurance contract is defined as a contract under which one party (the issuer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Significant insurance risk exists if, and only if, an insured event could cause the issuer to pay significant additional benefits. A contract that does not transfer significant insurance risk is not classified as an insurance contract under Ind AS 117.<\/span><\/p>\n<p><b>Key Terminologies Under Ind AS 117<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance risk: Risk other than financial risk transferred from the holder of a contract to the issuer<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Coverage period: The period during which the entity provides coverage for insured events<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fulfilment cash flows: Risk-adjusted, probability-weighted estimates of future cash flows, discounted to present value<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Contractual service margin (CSM): The unearned profit the entity will recognize as it provides services<\/span><\/li>\n<\/ul>\n<p><b>Initial Recognition<\/b><\/p>\n<p><span style=\"font-weight: 400;\">An entity shall recognize a group of insurance contracts at the earliest of:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The beginning of the coverage period of the group<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The date when the first payment from a policyholder in the group becomes due<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For a group of onerous contracts, when the group becomes onerous<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Reinsurance contracts held are recognized at the earlier of:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The date the underlying contracts are recognized<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The date the reinsurance contract becomes effective<\/span><\/li>\n<\/ul>\n<p><b>Aggregation of Contracts<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Contracts must be grouped at initial recognition into portfolios. A portfolio comprises contracts that are subject to similar risks and are managed together. Within each portfolio, contracts are further divided into:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A group of contracts that are onerous at initial recognition<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A group of contracts that have no significant possibility of becoming onerous<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A group of remaining contracts<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This classification ensures timely recognition of losses and prevents offsetting profitable and loss-making contracts.<\/span><\/p>\n<p><b>Measurement Models in Ind AS 117<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 prescribes three models for measuring insurance contracts:<\/span><\/p>\n<p><b>General Measurement Model (GMM)<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This is the default model used unless other models apply. Under this model, insurance contract liabilities are measured as the sum of:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fulfilment cash flows (FCF): Includes unbiased, probability-weighted estimates of future cash flows, risk adjustment, and discounting<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Contractual service margin (CSM): Represents unearned profit<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Revenue is recognized based on the coverage provided in each reporting period. CSM is amortized over the coverage period.<\/span><\/p>\n<p><b>Premium Allocation Approach (PAA)<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This is a simplified version of the GMM and is permitted for:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Contracts with coverage period of one year or less<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Contracts where the simplification produces a measurement reasonably similar to the GMM<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Under PAA, the liability for remaining coverage is measured similarly to the unearned premium reserve in traditional models, and the liability for incurred claims is measured using fulfillment cash flows.<\/span><\/p>\n<p><b>Variable Fee Approach (VFA)<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This is applicable only to insurance contracts with direct participation features. These contracts entitle the policyholder to a share of a clearly identified pool of underlying items.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The insurer\u2019s obligation is to pay the policyholder an amount equal to the fair value of the underlying items, less a variable fee for service. The VFA adjusts the contractual service margin for changes in the fair value of the underlying items.<\/span><\/p>\n<p><b>Fulfilment Cash Flows Components<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The fulfilment cash flows under Ind AS 117 include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Estimates of future cash inflows and outflows arising from the contract<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Adjustment to reflect the time value of money using discount rates consistent with the characteristics of the cash flows<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Risk adjustment for non-financial risk to reflect the uncertainty in the cash flows<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Entities are required to update estimates of fulfillment cash flows at each reporting date, with changes being recognized depending on their nature.<\/span><\/p>\n<p><b>Contractual Service Margin (CSM)<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The CSM is a crucial component of Ind AS 117 and represents the unearned profit from a group of insurance contracts. It is adjusted for:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Changes in future service expectations<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Experience adjustments (if related to future service)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Changes in discount rates (depending on accounting policy)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Allocation to profit or loss over the coverage period<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The CSM cannot be negative. If the fulfillment cash flows indicate a loss on initial recognition or subsequent measurement, the contract is classified as onerous and the loss is recognized immediately in profit or loss.<\/span><\/p>\n<p><b>Onerous Contracts<\/b><\/p>\n<p><span style=\"font-weight: 400;\">A group of insurance contracts is considered onerous if the fulfillment cash flows exceed the total expected inflows, including CSM. In such cases, the entire loss is recognized in profit or loss, and no CSM is recorded.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Onerous contracts must be tested at initial recognition and at each reporting period. Any changes in assumptions or actual experience must be analyzed to determine whether a contract or group of contracts has become onerous.<\/span><\/p>\n<p><b>Initial Measurement of Reinsurance Contracts Held<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Reinsurance contracts held provide the insurer with compensation for losses on one or more underlying insurance contracts. At initial recognition, the measurement includes:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fulfilment cash flows: Present value of expected inflows and outflows<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Contractual service margin: Represents the expected net gain on the contract<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The risk adjustment in reinsurance contracts reflects the risk transferred to the reinsurer and may differ from the risk adjustment for direct insurance contracts.<\/span><\/p>\n<p><b>Subsequent Measurement of Reinsurance Contracts Held<\/b><\/p>\n<p><span style=\"font-weight: 400;\">After initial recognition, the carrying amount of reinsurance contracts held is updated to reflect:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Changes in estimates of fulfilment cash flows<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Allocation of the contractual service margin<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gains or losses recognized in profit or loss<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If there is a loss-recovery component, such as when an underlying contract becomes onerous, the reinsurer&#8217;s compensation for the loss must be accounted for appropriately.<\/span><\/p>\n<p><b>Financial Statement Presentation<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 requires specific presentation of insurance contract balances:<\/span><\/p>\n<p><b>Statement of Financial Position<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The entity must present separately:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Assets and liabilities arising from insurance contracts issued<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Assets and liabilities from reinsurance contracts held<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Insurance and reinsurance contracts may not be offset unless specific criteria are met.<\/span><\/p>\n<p><b>Statement of Profit and Loss<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Revenue recognition follows the pattern of service delivery, and expenses are matched accordingly. Entities must present:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance revenue<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance service expenses<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance finance income or expenses (separately, based on accounting policy)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Disaggregation is encouraged to reflect the nature of the service and the risk profile.<\/span><\/p>\n<p><b>Transition Requirements<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Entities adopting Ind AS 117 for the first time can choose from three transition approaches:<\/span><\/p>\n<p><b>Full Retrospective Approach<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This method requires the restatement of prior periods using full historical data. It provides maximum comparability but may be impractical due to data limitations.<\/span><\/p>\n<p><b>Modified Retrospective Approach<\/b><\/p>\n<p><span style=\"font-weight: 400;\">If full retrospective application is impractical, entities can apply a modified approach using reasonable estimates.<\/span><\/p>\n<p><b>Fair Value Approach<\/b><\/p>\n<p><span style=\"font-weight: 400;\">As a last resort, entities can use the fair value of contracts at the transition date to measure the contractual service margin.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The chosen transition method must be applied consistently across portfolios and accompanied by detailed disclosures explaining the approach and its impact on comparability.<\/span><\/p>\n<p><b>Transition Disclosures<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 requires entities to disclose:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The transition approach used<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reconciliations of contract balances from previous standards to Ind AS 117<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The impact of transition on equity<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Key assumptions and estimation techniques used during transition<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These disclosures ensure users understand the effect of transition and facilitate meaningful comparisons.<\/span><\/p>\n<p><b>Interaction with Other Ind AS Standards<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ind AS 107: Requires disclosures about financial instruments embedded in insurance contracts<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ind AS 109: Governs recognition and measurement of investment components if separated<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ind AS 1: Affects classification and presentation of insurance contract liabilities<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ind AS 115: May apply to service components if separated from insurance contracts<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Understanding how Ind AS 117 interacts with these standards is crucial for accurate reporting and compliance.<\/span><\/p>\n<p><b>Introduction to Subsequent Measurement<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Once an insurance contract has been initially recognized and measured under Ind AS 117, the next critical aspect is its subsequent measurement. This phase determines how the contract&#8217;s value evolves over time, impacting the insurer&#8217;s financial statements.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Subsequent measurement ensures that the carrying amount of the insurance contract reflects the current expectations about future cash flows, risk adjustment, and the contractual service margin (CSM). Entities must reassess these elements at each reporting date.<\/span><\/p>\n<p><b>General Model for Subsequent Measurement<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Under the general model, the insurance liability is remeasured at each reporting period using updated estimates of:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fulfilment cash flows<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Risk adjustment for non-financial risk<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Contractual service margin (CSM)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The updated fulfilment cash flows are reassessed to reflect any changes in expected future cash inflows and outflows. The CSM is adjusted to reflect the changes in these estimates unless the changes relate to current or past services, which are recognized in profit or loss.<\/span><\/p>\n<p><b>Adjusting the CSM<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The CSM is adjusted for changes in fulfilment cash flows relating to future service. These include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Changes in estimates of future cash flows<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Changes in risk adjustment for future service<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The effect of time value of money<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If the change leads to a decrease in fulfillment cash flows, it increases the CSM, thereby deferring profit recognition. If the change increases the fulfillment cash flows beyond the carrying amount of the CSM, a loss is recognized in profit or loss.<\/span><\/p>\n<p><b>Unwinding of Discount<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The effect of the time value of money is recognized through the unwinding of discount. The interest accretion on the liability is calculated using the locked-in discount rate determined at the initial recognition of the group of contracts.<\/span><\/p>\n<p><b>Premium Allocation Approach (PAA)<\/b><\/p>\n<p><span style=\"font-weight: 400;\">For contracts that meet the eligibility criteria, entities may apply the Premium Allocation Approach, a simplified measurement model. It approximates the general model but is less complex and burdensome.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under the PAA, the liability for remaining coverage is initially measured as the premium received minus acquisition cash flows. Subsequent measurement includes:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Adding any premiums received<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Deducting revenue recognized as insurance services are provided<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Adjusting for changes in the liability for incurred claims<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This approach is typically used for short-duration contracts like general insurance.<\/span><\/p>\n<p><b>Measurement of Liability for Incurred Claims<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The liability for incurred claims is measured as the fulfilment cash flows related to those claims. This includes:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Probability-weighted estimates of future payments to settle claims<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">An explicit adjustment for non-financial risk<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The effect of discounting where material<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Discounting is applied to reflect the time value of money, unless the claims are expected to be settled within one year.<\/span><\/p>\n<p><b>Onerous Contracts and Loss Components<\/b><\/p>\n<p><span style=\"font-weight: 400;\">If a group of insurance contracts becomes onerous, the entity recognizes a loss component. A contract is onerous if the fulfilment cash flows exceed the carrying amount of the liability, including the CSM.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When a loss component is recognized:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The excess is recognized in profit or loss<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The CSM is eliminated<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The liability is adjusted upward<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The loss component is tracked separately and reversed only when future changes reduce the excess fulfillment cash flows.<\/span><\/p>\n<p><b>Contract Modifications and Derecognition<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 requires derecognition of an insurance contract only when it is extinguished\u2014i.e., when the obligation specified in the contract is discharged, cancelled, or expires.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the case of contract modifications:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">If a modification results in a substantial change in the contract\u2019s terms, the old contract is derecognized and the new contract is recognized<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurers must reassess the classification, measurement, and grouping of the new contract<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Examples of substantial modifications include significant changes to coverage, premiums, or contract boundaries.<\/span><\/p>\n<p><b>Presentation in Financial Statements<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 significantly changes how insurance contracts are presented in financial statements. The standard separates insurance revenue, insurance service expenses, and insurance finance income or expenses.<\/span><\/p>\n<p><b>Statement of Profit and Loss<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The profit and loss account must show:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance revenue<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance service expenses<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance service result<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance finance income or expenses<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Revenue reflects the release of CSM, risk adjustment, and incurred claims. Service expenses include claims incurred, acquisition costs, and maintenance costs. Finance income or expense may be presented separately or disaggregated based on accounting policy choices for discount rates.<\/span><\/p>\n<p><b>Statement of Financial Position<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The balance sheet includes:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Assets for reinsurance contracts held<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Liabilities for groups of insurance contracts<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These are presented at the portfolio level, disaggregated into:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Liabilities for remaining coverage<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Liabilities for incurred claims<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Reinsurance assets are measured using similar principles, with gains and losses from changes in fulfilment cash flows recognized based on their service components.<\/span><\/p>\n<p><b>Disclosures Under Ind AS 117<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Disclosures aim to provide transparency about the effect of insurance contracts on the financial position, performance, and cash flows. They are more extensive than previous standards.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Key disclosures include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reconciliations of opening to closing balances of contract assets and liabilities<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Revenue recognition<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Components of insurance finance income or expenses<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Significant judgements in applying the standard<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Methods used to measure fulfilment cash flows<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Entities must disaggregate disclosures by portfolio or group of contracts to provide meaningful information.<\/span><\/p>\n<p><b>Risk Adjustments and Assumptions<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Disclosures must also explain how risk adjustments were determined, including:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Confidence level used (if a technique based on confidence level is used)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Diversification benefits considered<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The rationale behind the method chosen<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Assumptions used in measuring fulfilment cash flows must be disclosed, especially where changes significantly affect the liability valuation.<\/span><\/p>\n<p><b>Transition Requirements and Retrospective Application<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 requires a full retrospective application unless impracticable. If full retrospective application is not feasible, entities can apply either the modified retrospective approach or the fair value approach.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Under the full retrospective method, past contracts are recalculated as if Ind AS 117 had always been applied<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The modified retrospective method allows simplifications where data is unavailable<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The fair value approach uses the fair value of contracts at the transition date as the starting point<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Entities must disclose the transition approach used and explain the reasons behind the choice.<\/span><\/p>\n<p><b>Practical Challenges in Implementation<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Implementing Ind AS 117 brings operational, system, and actuarial challenges. These include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Updating IT systems to support new measurement and reporting requirements<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Enhancing actuarial models to produce granular data<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Training finance and reporting teams on the new framework<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Aligning audit and internal control processes<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Cross-functional coordination is essential to ensure consistent and accurate implementation.<\/span><\/p>\n<p><b>Judgement and Estimation Uncertainty<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The use of current estimates and regular reassessment introduces volatility and complexity. Significant judgement areas include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Determining discount rates<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Setting risk adjustment levels<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Estimating future cash flows<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Identifying contract boundaries<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Disclosure requirements aim to help users understand the degree of uncertainty and sensitivity to changes in these assumptions.<\/span><\/p>\n<p><b>Comparative Information and Restatement<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Entities must restate comparative information for one year prior to the date of initial application, unless impracticable. If restatement is not possible, the cumulative effect is adjusted through retained earnings.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Comparative financial statements must be clearly labelled and should explain the nature and effect of the restatement.<\/span><\/p>\n<p><b>Introduction to Presentation and Disclosure Requirements<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 not only establishes principles for recognition and measurement but also places significant emphasis on how insurance contracts should be presented and disclosed in financial statements. Clear and consistent presentation enables users to assess the financial position, performance, and risk exposure of insurers more effectively.<\/span><\/p>\n<p><b>Statement of Financial Position Requirements<\/b><\/p>\n<p><span style=\"font-weight: 400;\">An entity must present:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Groups of insurance contracts that are assets separately from groups that are liabilities.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reinsurance contract assets and liabilities distinctly.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The line items are not allowed to be netted off unless specifically permitted, and the unbundling of components must be separately disclosed if applicable.<\/span><\/p>\n<p><b>Separate Presentation for Reinsurance<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 mandates that entities present reinsurance contracts held separately from insurance contracts issued, both in the statement of financial position and in the statement(s) of financial performance. This distinction highlights the different risk profiles and cash flow expectations associated with these contracts.<\/span><\/p>\n<p><b>Statement of Profit and Loss Requirements<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The income statement should include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance service result, comprising insurance revenue and insurance service expenses.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Insurance finance income or expenses, presented either in profit or loss or partly in other comprehensive income, depending on the entity\u2019s accounting policy choice.<\/span><\/li>\n<\/ul>\n<p><b>Insurance Revenue<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Insurance revenue represents the amount of expected consideration earned as the entity provides insurance coverage. It reflects:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Release of the liability for remaining coverage<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Allocation of acquisition costs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Adjustments for the time value of money<\/span><\/li>\n<\/ul>\n<p><b>Insurance Service Expenses<\/b><\/p>\n<p><span style=\"font-weight: 400;\">These expenses reflect claims incurred, other insurance service costs, and changes in fulfilment cash flows related to past and current services.<\/span><\/p>\n<p><b>Insurance Finance Income or Expenses<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The standard provides flexibility in presenting insurance finance income or expenses:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In profit or loss using a systematic allocation based on the characteristics of the contract<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Alternatively, the effect of changes in discount rates may be presented in other comprehensive income<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This choice allows entities to align financial reporting with their performance metrics and internal management.<\/span><\/p>\n<p><b>Disclosure Objectives<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Disclosures under Ind AS 117 aim to provide information that:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Explains the amounts recognized in the financial statements<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Discloses significant judgements made in applying the standard<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Describes the risks arising from insurance contracts<\/span><\/li>\n<\/ul>\n<p><b>Disaggregation in Disclosures<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Entities are required to disaggregate disclosures to allow users to understand the effect of insurance contracts on the financial statements. This involves separating information by:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Portfolio or group<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Type of contract (life, non-life, reinsurance)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Measurement models used<\/span><\/li>\n<\/ul>\n<p><b>Judgement and Estimation Inputs<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Key judgements must be disclosed, such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The level of aggregation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Discount rate assumptions<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Risk adjustment techniques<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This transparency ensures that users can assess the robustness of the reported figures and the reliability of measurement techniques.<\/span><\/p>\n<p><b>Disclosure of Changes in Fulfilment Cash Flows<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Entities must explain changes in the liability for remaining coverage and the liability for incurred claims, including:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Expected future claims<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Experience adjustments<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Impact of changes in assumptions<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These disclosures help users understand the evolution of insurance liabilities over time and the reasons for changes.<\/span><\/p>\n<p><b>Transition Requirements<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Transitioning to Ind AS 117 requires careful planning and execution. The standard offers several approaches to facilitate a smooth transition:<\/span><\/p>\n<p><b>Full Retrospective Approach<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This is the preferred method. It requires restating prior periods as if Ind AS 117 had always been applied. This approach provides the most comparable information but may be impractical if historical data is unavailable.<\/span><\/p>\n<p><b>Modified Retrospective Approach<\/b><\/p>\n<p><span style=\"font-weight: 400;\">If the full retrospective approach is impractical, the modified approach can be used. It includes specified simplifications such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Estimating cash flows based on available information<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Approximating the contractual service margin<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This method requires consistent application across groups of contracts.<\/span><\/p>\n<p><b>Fair Value Approach<\/b><\/p>\n<p><span style=\"font-weight: 400;\">When neither retrospective approach is feasible, the fair value approach allows the entity to use the fair value of contracts at the transition date as a proxy for fulfilment cash flows. This method is often simpler but provides less comparability with prior periods.<\/span><\/p>\n<p><b>Transition Disclosures<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Regardless of the transition approach used, entities must disclose:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The method used<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Groups of contracts affected<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The impact on financial statements<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reconciliations of changes in the contractual service margin and liabilities<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These disclosures help users understand how the change in accounting policy impacts the comparability and reliability of the financial information.<\/span><\/p>\n<p><b>Practical Implementation Challenges<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Transitioning to and applying Ind AS 117 in practice comes with several challenges:<\/span><\/p>\n<p><b>Data Collection and System Overhaul<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Existing IT systems may not support the granular data requirements of Ind AS 117. Significant investment in systems and data management is often necessary.<\/span><\/p>\n<p><b>Training and Change Management<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Stakeholders across the organization, from finance teams to actuarial functions and auditors, require extensive training to understand the new concepts and measurement models.<\/span><\/p>\n<p><b>Reassessment of Existing Contracts<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Entities must reassess contracts to determine whether they meet the definition of insurance contracts under Ind AS 117 and apply the correct measurement model.<\/span><\/p>\n<p><b>Separation of Components<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Identifying embedded derivatives, investment components, and other service elements within contracts can be complex and requires robust judgement and documentation.<\/span><\/p>\n<p><b>Industry-specific Implications<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Different segments of the insurance industry face unique challenges under Ind AS 117:<\/span><\/p>\n<p><b>Life Insurance<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Life insurers often deal with contracts of long duration and with complex cash flows. Applying the General Measurement Model requires careful estimation of the contractual service margin and frequent remeasurement.<\/span><\/p>\n<p><b>General Insurance<\/b><\/p>\n<p><span style=\"font-weight: 400;\">General insurers may benefit from the PAA, which simplifies measurement but still requires careful attention to discounting and acquisition cost treatment.<\/span><\/p>\n<p><b>Reinsurance<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Reinsurance arrangements can be both complex and diverse. Ind AS 117 requires separate recognition and presentation, and entities must ensure that ceded and assumed reinsurance contracts are correctly classified.<\/span><\/p>\n<p><b>Interaction with Other Standards<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The application of Ind AS 117 must be considered in conjunction with other accounting standards:<\/span><\/p>\n<p><b>Ind AS 109 \u2013 Financial Instruments<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Investment components not closely related to insurance risk may be separated and measured under Ind AS 109.<\/span><\/p>\n<p><b>Ind AS 115 \u2013 Revenue from Contracts with Customers<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Contracts without significant insurance risk may fall under the scope of Ind AS 115 rather than Ind AS 117.<\/span><\/p>\n<p><b>Ind AS 1 \u2013 Presentation of Financial Statements<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Changes in the presentation of line items due to Ind AS 117 should align with Ind AS 1 requirements for clear and understandable financial statements.<\/span><\/p>\n<p><b>Governance and Audit Considerations<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 introduces new control and governance requirements:<\/span><\/p>\n<p><b>Strengthening Internal Controls<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Entities must implement controls to ensure data quality, compliance with modelling assumptions, and timely updates of inputs.<\/span><\/p>\n<p><b>Audit Readiness<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Auditors will require robust documentation of management\u2019s judgements and assumptions. Independent validation of models and reconciliations will be critical.<\/span><\/p>\n<p><b>Early Adopters and Global Trends<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Several global insurers who adopted IFRS 17 (the international equivalent of Ind AS 117) early have shared key insights:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The importance of integrated project teams combining finance, actuarial, and IT expertise<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The need for phased implementation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Benefits of improved understanding of profitability by product line<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These experiences are highly relevant for Indian insurers transitioning to Ind AS 117.<\/span><\/p>\n<p><b>Opportunities Arising from Ind AS 117<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Beyond compliance, Ind AS 117 presents strategic opportunities:<\/span><\/p>\n<p><b>Enhanced Transparency<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Investors and analysts will gain deeper insights into the profitability and risk exposure of insurance companies.<\/span><\/p>\n<p><b>Improved Product Design<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The standard enables insurers to design more efficient and transparent insurance products by focusing on long-term service profitability.<\/span><\/p>\n<p><b>Better Decision-Making<\/b><\/p>\n<p><span style=\"font-weight: 400;\">With granular insights into cash flows and margins, insurers can enhance pricing strategies, reinsurance arrangements, and capital allocation.<\/span><\/p>\n<p><b>Conclusion<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Ind AS 117 marks a significant shift in the way insurance contracts are recognized, measured, presented, and disclosed in financial statements. Its objective is to ensure that entities provide relevant and reliable information that truly reflects the financial impact of insurance contracts. This comprehensive standard introduces consistency in accounting practices across various types of insurance businesses and aligns Indian financial reporting with global standards.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The standard emphasizes transparency by mandating entities to disclose detailed insights into the assumptions, estimates, risks, and financial results tied to insurance contracts. With the introduction of models like the General Measurement Model, the Premium Allocation Approach, and the Variable Fee Approach, insurers are encouraged to reassess their data collection methods, internal controls, and actuarial support systems. The requirement to separate investment and service components and to recognize revenue over time helps users of financial statements better understand the insurer&#8217;s profitability and risk exposure.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Transitioning to Ind AS 117 may present practical challenges for insurers, particularly in terms of system upgrades, staff training, and re-evaluation of legacy contracts. However, the long-term benefits, such as improved investor confidence, better comparability across jurisdictions, and enhanced financial disclosures, make it a vital step forward for the industry.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ultimately, Ind AS 117 is more than just a compliance requirement; it is a framework that encourages greater clarity, accountability, and comparability. As insurers fully adopt and implement the standard, stakeholders across the financial ecosystem, including investors, analysts, and regulators, will benefit from more meaningful and comprehensive financial information.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Indian Accounting Standard (Ind AS) 117 governs the recognition, measurement, presentation, and disclosure of insurance contracts. Replacing Ind AS 104, this new standard aligns with [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1161],"tags":[],"class_list":["post-3633","post","type-post","status-publish","format-standard","hentry","category-ind-as-117"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Understanding Ind AS 117: Major Changes in Insurance Reporting Standards - Free Invoice Generator - Luzenta<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.luzenta.com\/blog\/understanding-ind-as-117-major-changes-in-insurance-reporting-standards\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding Ind AS 117: Major Changes in Insurance Reporting Standards - Free Invoice Generator - Luzenta\" \/>\n<meta property=\"og:description\" content=\"Indian Accounting Standard (Ind AS) 117 governs the recognition, measurement, presentation, and disclosure of insurance contracts. 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