Insurance - Planned technical deliberations now complete

Insurance – Planned technical redeliberations complete

This IFRS newsletter brings you the latest on the IASB’s insurance project

KPMG IFRS Insurance topic image: crowd crossing a street carrying open umbrellas

We examine the latest developments and what the discussions could mean for you.

The IASB has completed most of its technical redeliberations and moved closer towards publishing a new insurance contracts standard.

At its January meeting, the Board considered the level of aggregation for onerous contracts and allocation of the contractual service margin (CSM) and continued its discussion regarding discretionary cash flows.

“The IASB has completed its planned technical redeliberations and we expect the release of the final insurance standard around the end of this year.”

For a detailed discussion of these developments, read Issue 51 of our IFRS Newsletter: Insurance. Previous issues can be found on our Newsletters web page.

Level of aggregation

The Board agreed to provide additional guidance to enable entities to better assess the levels at which they can group insurance contracts for the purposes of the recognition of losses on onerous contracts and the allocation of the CSM. It also agreed that no exception should be made to the proposals when regulation affects the pricing of contracts.

Discretionary cash flows

For participating contracts under the general measurement model
that include discretionary cash flows to policyholders, the IASB agreed that an
entity should specify the effect of discretion.

Expected timeline

Now that it has completed its planned technical redeliberations, the Board intends – at its February meeting – to discuss whether it has complied with all of the required due process steps and whether the staff can begin the balloting process for the forthcoming insurance contracts standard.

Assuming that the final insurance contracts standard is completed around the end of 2016, the expected effective date of the final insurance contracts standard remains 1 January 2020 or 2021.

Visit our IFRS – Insurance hot topics page for the latest developments in the insurance contracts project.

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