Irdai to test new supervision framework from next month

New Delhi To promote a 'Principle based Regulatory regime' and foster ease of doing business, insurance sector regulator Irdai will roll out the first phase of pilot for 'Risk Based Supervision' (RBS) from next month. RBS is a shift towards adopting global best practices for supervision which focuses on proportionality, materiality and relies on holistic analysis of the activities of regulated entities from risk perspective, Insurance Regulatory and Development Authority of India (IRDAI) said in a statement on Tuesday. It will foster ease of doing business and encourage proactive risk identification and management, it said. Irdai has been working towards developing and implementing 'Risk Based Supervision' (RBS) framework for the insurance sector in India.

For this purpose, it said, the regulator has collaborated with Toronto Centre (TC), which is a not-for profit organisation, working with the mission of promoting strong supervision in order to enhance financial stability, crisis preparedness, and consumer protection. In order to ensure robust development and smooth implementation of RBS, Irdai has been engaging with various stakeholders over the past few months.

"After recent deliberations with Toronto Centre, the first phase of pilots for RBS are scheduled to commence from July, 2023," it said.