OSFI published a letter that provides an update on the milestones for the implementation of the IFRS 17 standard on insurance contracts. The update reflects the impact of COVID-19 on the IFRS 17 Project, including the IASB deferral of the IFRS 17 effective date to January 01, 2023. In a statement from the Superintendent on July 13, 2020, OSFI had announced that it would gradually restart policy development work, which was put on hold due to COVID-19 pandemic, in the Fall of 2020; this includes policy development work on the IFRS 17 Project. In this regard, the deadline for consultation on IFRS 17 Insurance Returns period has been extended to August 31, 2020. Furthermore, the IFRS 17 semi-annual progress reporting submission requirement will resume beginning September 30, 2020. Directed consultations on capital tests, including conducting quantitative impact study exercises, will also resume beginning in the Fall of 2020.
IASB had issued, on June 25, 2020, certain amendments to IFRS 17, including deferral of the effective date of the standard to January 01, 2023. Thus, OSFI has announced that it intends to finalize the 2023 guidelines for Life Insurance Capital Adequacy Test (LICAT), Minimum Capital Test (MCT), and Mortgage Insurance Capital Adequacy Test (MICAT) in 2022 to align implementation with the new IFRS 17 effective date. The letter also states that once the Canadian Accounting Standards Board incorporates amendments to IFRS 17 into the CPA Canada Handbook, OSFI will revise its Accounting Advisories on IFRS 17 and deferral of IFRS 9. It will also update the timeline for the key milestones communicated in its June 27, 2018 letter accordingly. In the letter that was published on June 27, 2018, OSFI had communicated to federally regulated life and property and casualty insurers its plans for adapting the insurance capital guidance for IFRS 17. OSFI encourages insurers to continue their efforts toward implementing IFRS 17 and to use the additional time provided by IASB for testing and quality assurance purposes. OSFI will continue to work with the industry and key stakeholders to support a robust IFRS 17 implementation.
Keywords: Americas, Canada, Insurance, Insurance Contracts, COVID-19, IFRS 17, Deferral of Effective Date, Reporting, IFRS 9, LICAT, MCT, MICAT, OSFI, IASB
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting