By Martin Edelmann, Member, International Accounting Standards Board
In 2021, insurers will apply the new accounting requirements in IFRS 17 Insurance Contracts. Since the International Accounting Standards Board (Board) issued IFRS 17 in May 2017, we have been providing support to insurers and others in understanding these new requirements.
Implementing IFRS 17 represents fundamental changes for some insurers. Many concepts in IFRS 17 are new; it is the first time an IFRS Standard has prescribed the measurement of insurance contracts. Because insurers currently use local requirements to account for their insurance contracts, they will approach the transition to the new accounting requirements from many different perspectives. Applying the requirements in IFRS 17 will prompt changes in insurers’ operations; for example, many insurers may have to upgrade their data, systems and processes.
We recognise that implementing IFRS 17 will be challenging, so we have made available many tools to help:
We created a dedicated email address for questions about IFRS 17. Anyone can submit an implementation question. Although we do not provide a formal technical enquiry service, such questions are useful for us to monitor IFRS 17 implementation and may result in further action. For example, we might develop educational materials related to a specific question.
2. Webcasts and webinars
Since May 2017, we have published a webinar introducing IFRS 17 as well as five webcasts discussing specific requirements, such as the simplifications available for some insurance contracts and the accounting for reinsurance contracts. We have also held webinars tailored to national standard-setters and to investors. More webcasts will become available in the coming months.
3. Transition resource group
We have established a transition resource group (TRG), which brings companies, auditors and regulators together in a public forum to discuss questions about implementing IFRS 17.
All TRG documents, including agenda papers and meeting summaries, will be available on the TRG for insurance contracts page.
The TRG cannot issue authoritative guidance or amend the Standard. However, its discussions can help identify topics for webcasts or for consideration by the Board or the IFRS Interpretations Committee.
Board members and staff regularly speak at conferences and other events organised by the IFRS Foundation or third parties. Since May 2017, we have attended more than 150 meetings around the world to present IFRS 17.
Information about events organised by the IFRS Foundation as well as links to supporting materials are available in our meeting and events diary.
5. Investor education
We have held many meetings with investors. To find out what investors asked during those meetings, see here. We have also produced educational materials tailored to investors, such as The Essentials—Busting insurance jargon, a publication that translates existing terminology and metrics into the language of IFRS 17.
Stay up to date
In the coming months, we will continue to invest considerable resources to help insurers and others prepare for 2021. To receive alerts about any new materials that we publish, follow the IFRS 17 Insurance Contracts Standard page.