Global insurance and reinsurance broker Willis Towers Watson welcomes this week’s decision by the International Accounting Standards Board (IASB) to introduce a one-year deferral of the mandatory effective date for the International Financial Reporting Standards (IFRS17) to 1 January 2022.
The new accounting standard had originally been planned for 1 January 2021 but financial bodies, as well as insurers and reinsurers, have been calling for delays.
The Board also decided to propose extending the temporary exemption for insurers to apply the financial instruments Standard, IFRS 9, to 2022 so that both IFRS 9 and IFRS 17 can be applied at the same time.
Based on feedback received from stakeholders, IASB staff have reportedly identified 25 areas of concern and the board has confirmed that it will commence discussions about potential amendments to IFRS 17 at its December 2018 meeting.
“Willis Towers Watson welcomes the delay in implementing the timetable,” said Kamran Foroughi, a Senior Director at Willis Towers Watson.
“However, this does not mean that insurers should delay IFRS 17 implementation projects, but rather it will allow preparers to adopt a value-add approach instead of struggling to achieve minimum compliance.”
“Insurers will also now have some capacity to consider business implications earlier and in a more measured way.”
Foroughi states that, given the current status, insurers should definitely keep going with ongoing IFRS 17 projects.
“But with the additional time, one practical short-term step is to revisit the project plans and consider what key aspects can now change given the additional 12 months,” adds Foroughi.
“In our experience, this will reduce project risks, enable more contingency time and enable more testing of processes and systems, including the ability to perform and implement improvements resulting from dry runs.”
