Financial Services Ireland

IASB proposes changes to IFRS 17 covering scope and transition

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IASB proposes changes to IFRS 17 covering scope and transition

At its meeting on the 7th of February 2019, the IASB considered six further potential changes to IFRS 17, including an issue deferred from December 2018. The Board tentatively decided to proceed with two of these changes but, in line with the IASB staff recommendation, did not agree with the four other proposed changes.

The IASB tentatively decided to:

  • Amend the scope of IFRS 9 Financial Instruments and IFRS 17 Insurance Contracts for contracts with insurance risk arising only from the settlement of some or all of the obligation created by the contract itself, for example, a loan with a waiver upon death. The amendment would enable entities issuing such contracts to apply either IFRS 17 or IFRS 9. The election would be made at a portfolio level.
  • Amend the transition requirements in IFRS 17 for liabilities that relate to the settlement of claims that were incurred before an insurance contract was acquired, when a full retrospective approach at transition is impracticable.

The Board decided not to change the other aspects of IFRS 17 transition requirements that it considered during this meeting. However, the staff noted it will continue to explore further solutions on the topic of retrospective application of risk mitigation and plan to bring back a paper on this topic to a future meeting.

The IASB staff expect to bring papers on the remaining potential changes to IFRS 17 to the March 2019 Board meeting. After the Board has considered all the individual topics, it will consider whether to go ahead with the changes. The IASB staff expect to publish an Exposure Draft of the amendments to IFRS 17 around the end of the first half of 2019.

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Ciara McKenna

Partner

James Maher

Insurance, Sector Leader






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