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The International Accounting Standards Board (Board) has today voted to propose a one-year deferral of the effective date for IFRS 17, the new insurance contracts Standard, to 2022.

The Board has also decided to propose extending to 2022 the temporary exemption for insurers to apply the financial instruments Standard, IFRS 9, so that both IFRS 9 and IFRS 17 can be applied at the same time.

The Board has proactively been working to support insurers and others with the transition to the new insurance contracts Standard, including through establishing a Transition Resource Group and providing education materials. As part of that process, it has sought to understand any concerns companies may have about their ability to get ready for the new insurance contracts Standard by the 2021 effective date.

The decision to propose a one-year deferral at this meeting acknowledges the uncertainty that arises from the Board’s discussions about IFRS 17, while being responsive to comments from stakeholders that implementation should not be unduly disrupted. By making this decision, the Board has provided a clear direction, which will help companies with their planning.

The proposed deferral is subject to public consultation, which is expected next year. The Board expects to discuss the merits of potential amendments to the Standard during its December meeting. The criteria against which any possible amendment would be considered were agreed at the October meeting and can be found in that month's Update.