ICAI mulling separate insurance specific accounting norms

Institute of Chartered Accountants (ICAI) is planning to come out with insurance-sector specific accounting standards which will provide more information to stakeholders, a top official said.     

Accounting body, ICAI has set-up a group of experts for this purpose which has already started working on it.     

"We are working for insurance industry-specfic accounting standards which will give a thorough and fair view of accounts of the insurance companies. These (standards) will come in the form of recommendations," ICAI president, Uttam Prakash Agarwal, told PTI here.     

The recommendations once approved would become mandatory, he said.     

At present, there are 32 accounting standards which are followed by all companies of different sectors, he said.     

"We have 32 notified accounting standards which are common for all companies. But there are more information which these 32 standards are not able to give," Agarwal said.     

The new accounting norms to be recommended by ICAI would be additional to the 32 notified accounting standards, Agarwal said.

"We have formed a group of 5-6 chartered accountants who are dealing with the insurance sector. The group has already started working," Agarwal said, adding that there was no timeline for ICAI to come out with these new standards.     

The focus of these new recommendations would be on the overall sector and not on some specific areas, he said.     

The experts in the group would come out with a white paper which would be forwarded to the ICAI president who would then recommend it to the Accounting Standards Board, Agarwal said.     

"The Accounting Standards Board will then keep the white paper in public for comments. After seeking comments from the public and other stakeholders, the Board will again send the papers to ICAI council. Once approved, ICAI would consult the insurance regulator, IRDA, and recommend the standards for the insurance sector," Agarwal said.     

Such standards would help stakeholders to get a better perspective of the insurance companies, he said.