The redeliberation discussions on the proposed amendments to IFRS 17 Insurance Contracts are now complete.
At its March 2020 meeting, The International Accounting Standards Board (the Board) decided to defer the effective date of IFRS 17 for another year to 1 January 2023. The Board also decided to extend the temporary exemption to IFRS 9 Financial Instruments, granted to insurers who meet specified criteria, to 1 January 2023.
This means that insurers now have just under two years to get themselves ready for a full year of parallel running before going live with reporting on the new basis.
There is a lot to do between now and 1 January 2023. Insurers need to make sure they have appropriate data, robust and tested systems in place, and a transition plan – these are just a few key areas that need to be ready by that effective date. It’s time to get IFRS 17 implemented.
To be prepared for 2023, companies need to understand the impact of the amendments on their business, work out what new data is required and ensure that it can be sourced on a robust basis, design, build and test new or updated systems and parallel-run new processes in order to be confident in their results reflecting IFRS 9 and IFRS 17.
The amendments to IFRS 17, including the additional year, will allow companies to revisit their implementation plans, reviewing them to make sure that there is a roadmap to deliver results in 2023, including gathering the data needed for transition, training the business on the changes they will see in 2023, and implementing a strategy for communicating those changes to stakeholders.
Companies now have everything they need to move ahead to the new effective date of 1 January 2023.
Any further issues identified during the balloting of the amendments will be brought forward for discussion at a future meeting. The drafting of the final text of the amendments to IFRS 17 will continue in line with the Board’s objective to issue the revised IFRS 17 in mid-2020.
Early adoption is permitted, and some insurers who are far along in their implementation project may decide to consider this option. Factors to consider are whether peers are also early adopting and, depending on jurisdiction, any regional endorsement requirements.
You can read our summaries of the Board’s proposed amendments and the Transition Resource Group (TRG) for Insurance Contracts discussions in our online magazine Insurance – Transition to IFRS 17.
We will be hosting a webcast on 8 April 2020 where we will discuss the operational implications of IFRS 17 and discuss what this means for insurers. Watch this space for our announcement to register for this webcast.
Visit home.kpmg/ifrs17 to read all of our insights on the new insurance contracts standard. Also, our insights on insurers’ progress with IFRS 17 and IFRS 9 implementation can be found on our In it to win it web page.
Please watch this space for further updates and speak to your usual KPMG contact to find out more about the Board’s deliberations.
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