IRDAI Directs Insurers to Undertake QIS for Risk-Based Capital Framework

The Insurance Regulatory and Development Authority of India (IRDAI) has directed insurance companies to conduct a Quantitative Impact Study (QIS 2) as part of the transition to a Risk-Based Capital (RBC) regulatory framework for the Indian insurance industry.

Quantitative Impact Study (QIS)

A Quantitative Impact Study (QIS) is a regulatory exercise conducted by IRDAI to assess the impact of proposed regulatory changes—specifically the Risk-Based Capital (RBC) framework—on Indian insurance companies.

• Purpose: To evaluate solvency requirements and capital adequacy under a risk-sensitive approach.
• Replaces the traditional fixed-solvency margin system with a framework aligned to global standards.

Key Objectives of RBC Framework

• Principle of RBC: Insurers will hold capital proportionate to the risks they undertake, including investment, underwriting, operational, and market risks.
• Objective: Strengthen financial stability, enhance policyholder protection, and support globalisation of India’s insurance industry.
• Moves Indian insurers closer to international solvency norms.

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