IASB Consults on Amendments to IFRS 17 on Insurance Contracts
IASB proposed to amend the insurance contracts standard IFRS 17. The amendments aim to reduce cost of implementing the standard and to make it easier for companies to explain their results when applying the standard. As per the proposal, entities would be required to apply the amended standard for annual reporting periods beginning on or after January 01, 2022, as opposed to the earlier date of January 01, 2021. The comment deadline is September 25, 2019 and IASB plans to publish the finalized amendments to IFRS 17 in mid-2020.
Post stakeholder discussions on the standard that initially issued in May 2017, IASB decided to propose amendments to IFRS 17 to alleviate certain concerns and challenges raised about implementing the standard. The proposed amendments are designed to minimize the risk of disruption to implementation already underway. They do not change the fundamental principles of the standard or reduce the usefulness of information for investors. The exposure draft proposes targeted amendments to IFRS 17 on the following topics:
- Scope exclusions—credit card contracts and loan contracts that meet the definition of an insurance contract
- Expected recovery of insurance acquisition cash flows
- Contractual service margin attributable to investment-return service and investment-related service
- Reinsurance contracts held—recovery of losses on underlying insurance contracts
- Presentation in the statement of financial position
- Applicability of the risk mitigation option
- Deferral of the effective date of IFRS 17 from 2021 to 2022
- Temporary exemption from IFRS 9 on financial instruments
- Transition modifications and reliefs
- Minor amendments in paragraphs BC147−BC163
Comment Due Date: September 25, 2019
Effective Date: January 01, 2022 (Proposed)
Keywords: International, Insurance, Accounting, IFRS 17, IFRS 9, Insurance Contracts, Financial Instruments, Reinsurance, Reporting, IASB
Featured Experts
Masha Muzyka
CECL, IFRS 9, and IFRS 17 expert; credit risk and insurance risk specialist; strategic planning and credit analytics solutions consultant
Metin Epözdemir
Metin Epözdemir helps European and African banks with design and implementation of credit risk, stress testing, capital management, and credit loss accounting solutions.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Related Articles
BIS Quarterly Review Discusses Developments in Fintech and ESG Space
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
OCC Identifies Operational Risk Deficiencies in MUFG Union Bank
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
EC Rule on Contractual Recognition of Write Down and Conversion Powers
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
ECB to Consider Climate Risks When Reviewing Collateral Framework
In a response to the questions posed by a member of the European Parliament, the President Christine Lagarde highlighted the commitment of the European Central Bank (ECB) to an ambitious climate-related action plan along with a roadmap, which was published in July 2021.
SRB Provides Update on Approach to Prior Permissions Regime
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
APRA Issues Further Guidance on Application of Securitization Standard
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
ACPR Publishes Corrective Version of RUBA Taxonomy
The French Prudential Control and Resolution Authority (ACPR) published the corrective version of the RUBA taxonomy Version 1.0.1, which will come into force from the decree of January 31, 2022.
Nordea Bank and EIB Sign Agreement to Fund Green Projects in Nordics
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
APRA Publishes FAQs on Capital Treatment of Overseas Subsidiaries
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
