IRDAI orders QIS 2 for move to Risk-Based Capital regime
Why in the news
IRDAI told insurers to run the second impact study as India shifts to risk-based capital.
Key facts
- A QIS tests how proposed rules affect insurers’ solvency and capital adequacy.
- The approach is risk-sensitive and follows global standards.
- Insurers hold capital in proportion to their investment, underwriting, operational and market risks.
Significance
- Stronger financial stability and policyholder protection.
- Supports globalisation of the insurance industry.
Exam angle
- Regulator: IRDAI.
- Old system replaced: fixed solvency margin.