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The Actuary The magazine of the Institute & Faculty of Actuaries

IASB unlikely to make IFRS 17 changes

The International Accounting Standards Board (IASB) is reluctant to make revisions to IFRS 17 amid fears that changes could disrupt existing implementation processes.

Insurers should assume 2021 date remains ©Shutterstock
Insurers should assume 2021 date remains ©Shutterstock

At a meeting earlier this week, the board agreed that potential changes would be “narrow in scope”, with a number of members arguing against compromising core principles of the standard.

The board also debated alternatives to postponing the implementation date, such as removing the requirement for comparatives, and differentiating between listed and unlisted companies.

However, both these options are thought to have significant disadvantages, with insurers now facing uncertainty around investment, and whether to accelerate or delay their timetables.

“Having spent 20 years preparing the standard, there is evidently no appetite for knee-jerk reactions,” Willis Towers Watson (WLTW) senior director, Roger Gascoigne, said.

“The board is clearly alert to the consequential impacts, particularly on insurers who have already invested significant amounts on implementation.”

It was concluded at this week’s meeting that changes should not result in less useful information for investors, disrupt existing planning processes, or risk undue delays to the 2021 implementation date.

This comes after nine insurance organisations wrote to the IASB asking specifically for a two-year delay, warning of “serious operational constraints” on insurers ability to meet the deadline.

In contrast, The European Supervisory Authorities wrote to the European Financial Reporting Advisory Group last week arguing against any delay in the EU’s endorsement process.

WLTW said insurers should assume that the 2021 date remains, but added that a delay would allow firms to adopt a value-add approach, instead of struggling to achieve minimum compliance.

“One practical short-term step may be to revisit the project plans, considering what key aspects would change if the date were delayed by a year or two,” senior director, Kamran Foroughi, said.  

“This would reduce project risks, enable more contingency time, and enable more testing of processes and systems.” 

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