OSFI Provides Update on Implementation of IFRS 17 in Canada
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.
Related Links
Keywords: Americas, Canada, Insurance, Insurance Contracts, COVID-19, IFRS 17, Deferral of Effective Date, Reporting, IFRS 9, LICAT, MCT, MICAT, OSFI, IASB
Featured Experts
Scott Dietz
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
Masha Muzyka
CECL, IFRS 9, and IFRS 17 expert; credit risk and insurance risk specialist; strategic planning and credit analytics solutions consultant
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Previous Article
EBA Launches Study on Cost of Compliance with Supervisory ReportingRelated Articles
ECB Finds Banks Unprepared for Pillar 3 Climate Risk Disclosures
The European Central Bank (ECB) published results of the 2022 supervisory assessment of climate-related and environmental risk disclosures among significant institutions (103) and a selected number of less significant institutions (28).
NCUA Assesses Credit Union Exposure to Climate-Related Physical Risks
The National Credit Union Administration (NCUA) released a Research Note that examines the exposure of credit unions to climate-related physical risks. In a related development
EBA Issues Multiple Regulatory and Reporting Updates for Banks
The European Banking Authority (EBA) is seeking comments, until July 31, 2023, on the draft Guidelines on the proposed common approach to the resubmission of historical data under the EBA reporting framework.
EC Adopts Regulation on Own Funds, Issues Other Updates
The European Commission adopted Delegated Regulations on own funds and eligible liabilities, on requirements for the internal methodology under the internal default risk model
CDP Platform to Report Plastic-Related Impact, Issues Other Updates
The Carbon Disclosure Project (CDP) announced that its global environmental disclosure platform has enabled reporting on plastic-related impact for nearly 7,000 companies worldwide
IASB to Enhance Reporting of Climate Risks, Proposes IFRS 9 Amendments
The International Accounting Standards Board (IASB) updated its work plan to enhance the reporting of climate-related risks in the financial statements,
BIS Addresses Data Gaps and Macro-Prudential Policy for Climate Risks
The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) published a brief paper that examines challenges associated with the use of macro-prudential policies to address climate-related financial risks.
FCA Sets Out Business Plan, Launches TechSprint on Greenwashing
The Financial Conduct Authority (FCA) published its business plan for 2023-24. The plan sets out details of the work planned for the next 12 months to achieve better outcomes for consumers and markets
UK Committee Sets Out Recommendations for Next Phase of Open Banking
The Joint Regulatory Oversight Committee (JROC), comprising the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) as co-chairs and the HM Treasury and the Competition and Markets Authority (CMA) as members
ECB Publishes Multiple Regulatory Updates for Banking Institutions
The European Central Bank (ECB) published the results of the 2022 climate risk stress test of the Eurosystem balance sheet,
