The International Accounting Standards Board (or Board) met on Tuesday 25 February to further discuss items related to the Exposure Draft (“ED”) Amendments to IFRS 17, published in June 2019.
The Board confirmed there would be no change to the level of aggregation of contracts, thereby retaining annual aggregation for grouping of contracts, even those insurance contracts where risk sharing crosses generations. This was despite firms with participating business having expressed practical implementation concerns.
The most significant changes proposed by the Board at the meeting:
Ralph Ovsec, Senior Director, Insurance Consulting and Technology, at Willis Towers Watson, said: “All stakeholders will welcome the conclusion of deliberations on changes to IFRS 17, even if some of the decisions reached do not reflect the wishes of some in the industry. With regard to the determination of the acquisition date of reinsurance contracts, ceding companies should be mindful in assessing potential unintended consequences related to the ability to take reinsurance relief on onerous contracts offered by reinsurance.
“While the Board has shown its willingness to re-open issues beyond the scope of the amendments proposed in the ED, the focus of the Board appears to be to minimise disruption to ongoing implementation projects.”
Ralph Ovsec, Senior Director,
Insurance Consulting and Technology, at Willis Towers Watson
“While the Board has shown its willingness to re-open issues beyond the scope of the amendments proposed in the ED, the focus of the Board appears to be to minimise disruption to ongoing implementation projects.”
The IASB will hold its next board meeting in March when it is expected to take a final decision on the effective date of IFRS 17 (and IFRS 9 for insurers). The current proposal is 1 January 2022, although some respondents have proposed a further one-year delay to 1 January 2023. Staff at the IASB have also confirmed they expect the amendments to be finalised and a standard published in mid-2020.
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