REGULATORY AND FINANCIAL REPORTING STANDARDS FOR THE INSURANCE INDUSTRY
R&C: The insurance industry remains on a journey of continuous regulatory change. What are the current challenges?
Hein: Insurers in the world are currently dealing with International Financial Reporting Standard (IFRS) 17. Its effective date has just been delayed by another year and will now be deferred to annual reporting periods beginning on or after 1 January 2023. However, not all details of the standard have yet been finalised and timelines for implementation are still very tight. The International Accounting Standards Board (IASB) also decided to extend the exemption currently in place for some insurers regarding the application of IFRS 9 Financial Instruments to enable them to implement both IFRS 9 and IFRS 17 at the same time. Looking at insurers reporting under US Generally Accepted Accounting Principles (GAAP), with Long Duration Targeted Improvements (LDTI) the situation does not seem to be that clear. For Securities and Exchange Commission (SEC)-filed insurers, the compliance date still is January 2022. And similar to IFRS 17, LDTI requires a four-quarter parallel run, meaning – if nothing changes – they should all be ready to go by the beginning of 2021. However, it is not yet clear whether the implementation date of LDTI will also be delayed by another year to stay aligned with IFRS 17. The same question applies to the alignment of the Current Expected Credit Losses (CECL) and IFRS 9 effective dates. And of course, there is also a significant number of insurers having to report both under IFRS and US GAAP at the same time, namely international insurance groups with US-based entities.
Apr-Jun 2020 Issue
SAS Institute