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Revised IFRS 17 Insurance Contracts
Revised IFRS 17 Insurance Contracts
Revised standard includes changes in key areas and a deferred effective date to 2023 to address stakeholder comments
Revised standard includes changes in key areas and a deferred effective date to 2023 to ad
Move ahead with confidence towards your IFRS 17 transition
The Board’s decisions to amend IFRS 17 Insurance Contracts in eight important areas and set a 2023 effective date for the new standard allows you to revisit implementation plans and to make sure that you’ve got a robust roadmap to deliver 2023 in safety.
► Video summary ► Share this on LinkedIn ► Detailed guidance
Our updated publication First Impressions contains detailed analysis and insight on the amended standard. For a high-level summary of the amendments, take a look at these videos and animations.
Effective date of IFRS 17
The amendments to IFRS 17 include a two-year deferral of the effective date and the fixed expiry date of the temporary exemption from applying IFRS 9 Financial Instruments granted to insurers meeting certain criteria.
Credit cards and loans that provide insurance coverage
Preparers of financial statements are no longer required to apply IFRS 17 to certain credit cards and similar arrangements, and loans that provide insurance coverage.
Accounting for investment services
The profit recognition pattern for insurance contracts under IFRS 17 has been amended to reflect insurance coverage and any investment services provided.
Accounting for insurance acquisition cash flows
Insurers are now 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.
Risk mitigation for direct participating contracts
The risk mitigation option that is available when derivatives are used to mitigate the financial risk of direct participating contracts has been extended. It is now also available when reinsurance contracts held or non-derivative financial instruments at fair value through profit or loss (FVTPL) are used.
Presentation of insurance contract assets and liabilities
Insurance contracts are now required to be presented on the balance sheet at the portfolio level – a higher level than originally required under IFRS 17.
Reinsurance of onerous contracts
The amendments address accounting mismatches that arise when an entity reinsures onerous contracts and recognises losses on the underlying contracts on initial recognition.
Accounting for acquired claims liabilities on transition
The Board has added 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.
Find out more
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.
Key contacts
Joachim Kölschbach
KPMG global IFRS insurance leader
Mary Trussell
KPMG global lead, insurance accounting change
Acknowledgements
We would like to acknowledge the principal authors of our communications on the June 2020 revised version of IFRS 17: Alana Hudson, Bob Owel and India Preswick.