Insurance Europe, the European insurance and reinsurance federation, has called for the new International Financial Reporting Standard (IFRS 17) to be reopened and its implementation delayed by two years in order to address several underlying issues and allow time for companies to prepare.
The federation said that studies by the European Financial Reporting Advisory Group (EFRAG) had identified 11 issues with the way the new accounting standard depicts insurers’ performance and business models that must be resolved before IFRS 17 can be endorsed.
Insurance Europe claimed that the re/insurance industry was well advanced in its efforts to propose workable solutions to all 11 issues, and requested that the decision to re-open IFRS 17 be made as soon as possible.
It said that the additional time would allow re/insurers to deal with operational constraints, such as the current lack of software solutions, and would promote implementation of suitable quality and reliability.
Such a decision would also afford re/insurers more clarity on the impact of the new standard, and would promote better understanding of the potentially very different new financial reporting figures, Insurance Europe suggested.
The federation stressed that it did not expect a delay to result in companies pausing implementation projects, and clarified that it remains committed to supporting high-quality reporting standards for re/insurance contracts that improve financial reporting.