CMF published a regulatory proposal on the implementation of IFRS 17 on insurance contracts in Chile. The proposed regulation is intended to modernize the rules on “technical reserves,” aligning them with the best international practices and principles in this field. IFRS 17 seeks to improve comparability among information from different companies and to ensure that technical liabilities on the balance sheet of the insurance companies are valued at market value. The consultation period will be open until May 12, 2021. CMF also announced that it will soon send a notice, along with instructions, to the insurance companies, to conduct its second impact assessment on the implementation of IFRS 17.
The implementation of IFRS 17 is expected to improve the transparency of information reported by insurance companies in their financial statements. It is also expected to ensure that companies provide relevant information, which accurately represents the insurance contracts, by establishing the principles for recognition, measurement, presentation, and disclosure with respect to the said contracts. The proposal considers both the experience of other jurisdictions that serve as a reference for Chile and the international recommendations on the constitution of technical reserves. The following are the key elements addressed in the proposed regulation:
- Implementing IFRS 17 and replacing the current standard, which is mainly based on IFRS 4
- Establishing main principles and models provided by IFRS 17, in addition to specific instructions that companies must follow to measure their technical liabilities
- Establishing special considerations applicable to the national market, specifically for life annuities, disability and survival insurance, and the earthquake catastrophe reserve
- A public consultation requiring a statement from the insurance industry on the aspects highlighted by CMF as relevant
Comment Due Date: May 12, 2021
Keywords: Americas, Chile, Insurance, Insurance Contracts, IFRS 17, IFRS 4, Disclosure, CMF
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.