Proposals to amend the new standard in seven areas and defer its effective date to 2022
Proposals to amend IFRS 17 in seven areas and defer its effective date to 2022
Proposals to amend IFRS 17 Insurance Contracts in seven important areas and set a 2022 effective date for the new standard, should prompt insurers to take action.
The proposed amendments to IFRS® 17 Insurance Contracts have been published. The key proposals are a one-year deferral of the effective date of IFRS 17 to 1 January 2022 and changes to the standard’s requirements in seven important areas.
The International Accounting Standards Board (the Board) has been monitoring and supporting IFRS 17 implementation over the past two years – its exposure draft (ED) of amendments to IFRS 17 responds to the concerns and implementation challenges raised by insurers and other stakeholders. The Board is accepting comments on the proposed amendments until 25 September 2019.
Our video and high-level guide will help you understand the changes and guide the decisions you need to make for your IFRS 17 implementation projects. Also, look out for our detailed insight and analysis coming soon.
Under the Board’s proposals, insurers would be required to allocate part of the insurance acquisition cash flows directly attributable to newly issued contracts to expected contract renewals, meaning that such newly issued contracts are less likely to be onerous.
The Board proposes that the risk mitigation option that is available when derivatives are used to mitigate the financial risk of direct participating contracts, would also be available when proportionate reinsurance contracts are used.
The Board is proposing to add a further modification to the transition requirements for claims liabilities acquired by an entity in a business combination or portfolio transfer to provide practical relief to insurers.
Head of Banking and Insurance
We would like to acknowledge the principal authors of our communications on the June 2019 exposure draft of the IFRS 17 amendments: Albert Chai, Alana Hudson, Hagit Keren and Lindsey Stewart.