OSFI Consults on Regulatory Forms and Instructions for IFRS 17
OSFI is seeking views on the draft manual of regulatory forms and instructions for IFRS 17. OSFI published a letter which advises federally regulated insurers of the proposed changes made to the Canadian Council of Insurance Regulators (CCIR) manual of regulatory forms and instructions. The proposed changes ensure that federally regulated insurers will continue to report their financial statements to OSFI in accordance with the Generally Accepted Accounting Principles (GAAP). The public consultation will run till March 21, 2020.
The consultation encompasses the following regulatory forms and instructions:
- Life/Property and Casualty (P&C)/Mortgage Insurers Core Financial Statement Return
- Life/P&C/Mortgage Insurers Supervisory Quarterly Statement Return
- Life/P&C/Mortgage Insurers Supervisory Annual Supplement Return
- Life/P&C/Mortgage Insurers Provincial Statement Return
- The corresponding instructions and validation rules template for each regulatory form
The legislation governing the federally regulated insurers stipulates that "financial statements shall, except as otherwise specified by OSFI, be prepared in accordance with GAAP, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada." GAAP for the federally regulated insurers is effectively the International Financial Reporting Standard (IFRS) as issued by IASB. Through its authority, OSFI may specify additional accounting guidance or disclosures.
In May 2017, IASB had issued IFRS 17 on insurance contracts, which replaces IFRS 4, the current insurance accounting standard. IFRS 17 is effective for annual periods beginning on or after January 01, 2021. This means that the federally regulated insurers will be required to publish financial statements and reporting regulatory returns complying with IFRS 17 for their first quarter in the fiscal year beginning on, or after, January 01, 2021. In June 2019, IASB released an exposure draft proposing amendments to IFRS 17, with one of the amendments being a deferral of the effective date of IFRS 17 by one year to January 01, 2022. IASB intends to finalize the IFRS 17 amendments by mid-2020. OSFI expects federally regulated insurers to continue efforts toward implementation in 2021 and to use the extra year (if extended) for testing and quality assurance purposes.
Related Links
- OSFI Letter
- Life Insurance Return for Consultation
- P&C Insurance Return for Consultation
- Mortgage Insurance Return for Consultation
Comment Due Date: March 21, 2020
Keywords: Americas, Canada, Insurance, IFRS 17, Insurance Contracts, Reporting, Forms and Instructions, GAAP, IFRS 4, IASB, OSFI
Featured Experts
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Gavin Conn
Experienced life actuary; background in economic capital modeling; ALM specialist; IFRS 17 researcher
Related Articles
CBUAE Issues Regulation for Low-Risk Specialized Banks
CBUAE has issued a regulation that introduces the licensing and supervision framework for low-risk, specialized banks.
APRA Proposes Guidance to Support Prudential Standard on Remuneration
APRA is consulting on CPG 511—the draft Prudential Practice Guide on remuneration for banks, insurers, and superannuation licensees—with the comment period ending on July 23, 2021.
MAS Announces Grant Scheme to Spur Adoption of Regtech Solutions
MAS announced a new RegTech grant scheme and an enhancement of the Digital Acceleration Grant (DAG) scheme to accelerate technology adoption in the financial sector.
PRA Review Finds Most Banks Compliant with Regulatory Reporting Rules
PRA published a letter that sets out findings from the 2020 Internal Audit Review of the Collections function of a sample of non-systemic banks and building societies.
EIOPA Launches Consultation on Interbank Offered Rate Transitions
EIOPA launched a consultation on the Interbank Offered Rate (IBOR) transitions, in context of the EU Benchmarks Regulation.
EIOPA Seeks Feedback on Approach to Blockchain and Smart Contracts
EIOPA published a discussion paper on uses cases of, and the European approach to, blockchain and smart contracts in the insurance sector.
HKMA Outlines Work Priorities for 2021, Grants License to NH Bank
HKMA granted a banking license to NongHyup Bank (also NH Bank), which is incorporated in the Republic of Korea.
PRA Proposes Options for Regulatory Framework for Non-Systemic Banks
PRA published a discussion paper that explores options for developing a simpler but resilient prudential framework for banks and building societies that are neither systemically important nor internationally active.
ECB Issues Opinion on Proposal for Market Infrastructures Based on DLT
ECB published an opinion on the proposal for a regulation on the pilot regime for market infrastructures based on distributed ledger technology.
EBA Proposes Standards to Determine Risk-Weight for Immovable Property
EBA proposed regulatory technical standards that specify how to identify the appropriate risk-weights and conditions when assessing minimum loss given default (LGD) values for exposures secured by immovable property.
