IFRS 17 Insurance Contracts is effective from 1 January 2021.
That’s plenty of time, right?
Well, perhaps if you are already fully engaged in an implementation project, having kept up-to-date with the progress of IASB discussions and decisions between the 2013 exposure draft and the final standards that were released on the 18th May.
But what if that is not the case?
If IFRS 17 is still on the ‘to do’ list, then perhaps 2021 is closer than it seems. True, three and a half years is a long time, but once this is broken down into bite-size chunks, the time quickly disappears.
Ideally, companies would want to aim for at least one year of parallel running of the new regulations alongside old (IFRS 4 Phase I) with the opportunity to discuss the impact on profit recognition and tax position to interested parties.
This would mean that systems and processes need to be up and running by the end of 2019. But before this can happen, the models and systems will need to be built or adapted and then tested. This could take you back to 2018, if not earlier.
To know how to adapt models and systems, a scoping exercise will need to be undertaken. There will need to be a process of requirements gathering and impact assessments.
In addition, time will be needed for all those lengthy discussions that actuaries like to have about assumption setting and methodologies – what’s the methodology for allocating contracts to groups, how will the yield curve assumptions be determined, how is the risk adjustment calculated? Bringing you back to 2017 – this year!
It turns out 2021 is not so far away after all.
To ensure that IFRS 17
If you would like to discuss your specific challenges in IFRS 17 preparation and find out how MBE can assist, please get in touch.
