Press Release - JANUARY 29, 2020
AM BestTV: IFRS 17 Will Present a Clearer View of Insurers, Says AM Best Associate Director
FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 29, 2020
Silverman highlighted how IFRS 17 improves upon current standards.
“IFRS 17 is an accounting standard promulgated by the International Accounting Standards Board and is a new accounting standard for insurance contracts,” said Silverman. “It is meant to solve the reporting inconsistence of IFRS 4, and consistency is something that users of financial reporting value.”
“The all-encompassing motivating factor for IFRS 17 was that the previous reporting was viewed to be bad for the public image of the insurance sector in financial markets because arguably, you have to be too much of a specialist to get a reasonable picture of an insurer’s performance and circumstances. That was not sufficiently communicated by previous financial reporting.”
Silverman added that insurers have not objected to implementation delays as they work through the large-scale changes.
“There are many difficulties associated with implementation. Part of the reason for the way financial reporting was previously done is that the framework was part of a system that was for the convenience of the companies. IFRS 17, in meeting the challenges that it was created to do, does involve new records, new data, as well as new systems and the implementation amounts to quite a chasm for the companies to cross.”
IFRS 17 is scheduled to go into effect on Jan. 1, 2022.
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