The Insurance Regulatory & Development Authority (Irda) has asked domestic life insurers to initiate the process of calculating economic capital and submit the same along with the appointed actuaries’ annual report for the year ending March 2010.

In this context, the basic reference material is the “Report of the Committee to draw the road map for moving towards Economic Capital and market consistent embedded value for life insurance industry in India (June 8, 2009)” constituted by the Institute of Actuaries of India for this purpose.

Whenever the appointed actuaries deviate from the suggested practice they have to explain the rationale of the same and give further details, said Irda.

This circular comes into effect for the actuarial valuation of the liabilities for the life insurers since March end 2010. According to Irda, at this stage it is envisaged that this exercise will be done on an annual basis, coinciding with the actuarial valuation for the March end position.