On 14 November 2018 the IASB proposed putting off the introduction of the IFRS 17 by one year. The postponement for the implementation of IFRS 9 has also been extended by one year. This means that the implementation date for both standards is now set to 1 January 2022.
Since the publication of IFRS 17 in May 2017, there has been a lot of feedback from the industry about possible implications for the implementation of the standard. On this basis, the IASB concluded that a year’s delay is necessary to be able to make possible adjustments to the standard.
Earlier the IASB established the following criteria for evaluating possible amendments to IFRS 17.
In the coming months it will become clear whether any, and if so, what adjustments are necessary to IFRS 17. The basis for possible adjustments is the 25-point list which was discussed during the October Board meeting. Some of these points are related to the 11 issues and solutions put forward by the CFO Forum.
Postponing the introduction of IFRS 17 and IFRS 9 will give insurers more time to further explore and work out a number of important issues, such as the choice of interest rate curves to be applied and the methodology for risk adjustment. Thus far there are limited developments in the Dutch market, while the interest rate curves to be applied in the transition will largely determine the level of the CSM.
In addition, the postponement offers room for better analysis of the choices for the transition method and thorough research into the availability of data. All this is to be considered in conjunction with the challenges to systems and models, such as being able to calculate the CSM at policy level.
© 2022 Triple A Risk Finance. All rights reserved.