ICICI Prudential Life Insurance, the country’s third-largest private life insurer by premium, will seek a one-year forbearance from implementing Indian Accounting Standards (Ind AS)-based financial reporting that took effect on April 1.

“Technically, we should be live with Ind AS, but as approved by our board, we will be seeking forbearance for a year,” Dhiren Salian, CFO, said during the company’s fourth-quarter earnings call. Salian added that a key reason for the request is the lack of clarity on inputs required to compute the Contractual Service Margin (CSM). The CSM represents unearned profits from insurance contracts. This will be recognised gradually over the policy period rather than upfront, aligning revenue recognition with the delivery of insurance services.

He also added that the transition timeline is tight, given the insurer typically reports results within the first 15 days of a quarter. “We would need some time to be able to gear our systems up to be able to manage the transmission there,” he said. 

The impact of Ind AS adoption will be most pronounced for life insurers, especially those with long-duration, savings-heavy products such as participating (par) and non-participating (non-par) policies, Motilal Oswal said in its March report. These products currently allow upfront profit recognition, while the shift to a CSM-based approach will defer and smoothen earnings over time. As a result, listed insurers such as HDFC Life, SBI Life and ICICI Prudential Life may see a visible change in reported profitability and key metrics in the initial years, even if underlying business fundamentals remain unchanged. 

Earlier, Shriram Life Insurance CEO Casparus JH Kromhout had also told FE that the company would seek a one-year forbearance from Ind AS implementation.

Last month, the Insurance Regulatory and Development Authority of India (Irdai) notified final regulations for the transition to Ind AS, effective April 1, 2026. The regulator has allowed a one-year forbearance for insurers unable to prepare financial statements under the new standards, with requests to be submitted by April 30, 2026.

Currently, insurers follow the Indian Generally Accepted Accounting Principles (IGAAP) framework. The shift to Ind AS is aimed at aligning India’s accounting standards with International Financial Reporting Standards (IFRS), improving consistency, transparency and comparability in financial reporting across the sector. During the current fiscal, insurers are expected to begin reporting under the Ind AS framework, alongside existing accounting standards during the transition phase.