May 31, 2018

APRA issued a letter providing high-level observations and summary of results of the 2017 survey on impact of accounting standards AASB 16 (Leases) and AASB 17 (Insurance Contracts) on insurance firms. The survey results demonstrate the complexity of AASB 17 and highlight that careful planning will be needed to ensure that insurers are appropriately prepared to meet their obligations under the new standard, once it is effective.

The Australian Accounting Standards Board (AASB) has issued new standards AASB 16 and AASB 17. In September 2017, APRA wrote to all general insurers, life insurers, and private health insurers to inform them that APRA would not be altering its prudential or reporting frameworks until the impact of the forthcoming changes is better understood. APRA also sent an information request to the insurance industry to inform its understanding of the impact of the new standards. APRA encourages all insurers to review the results of the survey and consider the impact of AASB 16 and AASB 17 on their operations. APRA intends to conduct another AASB 17 survey once insurers are more advanced with their implementation, to better understand the quantitative impact of the changes. 

 

Related Link: Letter with Survey Results (PDF)

Keywords: Asia Pacific, Australia, Insurance, AASB 16, AASB 17, Leases, Insurance Contracts, Impact Survey 2017, APRA

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